Telecom stocks witness selling pressure

Shares of four telecom companies fell by 2.51% to 8.18% at 12:58 IST on BSE after Reliance Industries Chairman Mukesh Ambani reportedly announced free voice calls and cheap internet plan for Reliance Jio customers.

Idea Cellular (down 8.18%), Bharti Airtel (down 6.83%), Reliance Communications (down 4.08%) and Tata Teleservices (Maharashtra) (down 2.51%), edged lower.

Index heavyweight Reliance Industries (RIL) was down 0.76% at Rs 1,050.10.

The S&P BSE Sensex was up 31.14 points, or 0.11% at 28,483.31.

According to reports, Reliance Industries Chairman Mukesh Ambani announced the launch of "Jio Welcome Offer" from 5 September 2016. Under the new plan, Reliance Jio Infocomm (RJIL) customers can avail data, voice, video and Jio's bouquet of apps for free till 31 December 2016. Reliance Jio will not charge for voice calls or for roaming calls within India. Jio will charge Rs 50 for one gigabyte of 4G data, reports added. Jio's data prices are roughly one-fifth of what customers have been charged by other operators so far.

Reliance Jio's aggressive pricing could force other telecom firms to cut voice and data tariffs. The price war may strain finances of most telecom operators, who are already laden with high debt.

Ambani made the announcement of free voice calls and cheaper 4G data plans during Reliance Industries' (RIL) annual general meeting in Mumbai today, 1 September 2016. RJIL is a unit of RIL. In 2015, RJIL successfully acquired the right to use 4G spectrum in 13 key circles across India.

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