Telecom stocks slip on worry of DoT proposed action

The shares of most telecommunication companies are trading down by 2-4% on the bourses on reports that the department of telecom (DoT) would slap showcause notices on the holders of 85 licences for violation of eligibility norms.

"DoT will also issue showcause notices to holders of 119 licences for failing to meet stipulated rollout obligations. Only a few days earlier, regulator Trai recommended cancelling 69 of the 127 licences issued from 2006 because of rollout lapses" says Business Standard report.

"DoT's tough stance virtually puts in the dock nine licensees that have been named in both reports. They include Unitech Wireless (Uninor), Datacom (now Videocon), Loop Telecom, Etisalat DB (originally Swan Telecom), S-Tel and Allianz Infratech. Sistema Shyam and Aircel have only been pulled up for rollout obligation infringements," the report added.

Among the individual stocks - Reliance Communications, Videocon Industries, Unitech and Idea Cellular trading 2-4% on the Bombay Stock Exchange (BSE).