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Led by Bharti Airtel, telecom stocks tumbled today on worries of intensifying competition after Idea Cellular announced up to 70 per cent cut on 3G rates.
Bharti Airtel settled 4.29 per cent lower at Rs 281.95 on the BSE and was the biggest loser in the Sensex pack. During the day, the stock plunged 4.92 per cent to a 52-week low of Rs 280.10.
Idea Cellular slipped 3.48 per cent to close at Rs 74.95, while Reliance Communications was down 1.94 per cent to Rs 63.10.
Following industry leader Bharti Airtel move to cut tariff, Aditya Birla Group firm Idea Cellular yesterday announced slashing charges for 3G services by up to 70 per cent.
Analysts said that cut on 3G rates by 70 per cent affected investor sentiments.
“Bharti Airtel tumbled on worries of intensifying competition after Idea Cellular announced up to 70 per cent price reduction on its 3G services,” Sharmila Joshi Head Equity Fairwealth Securities said.
According to Mr Milan Bavishi, Head Research Inventure Growth and Securities, “Major telecom players have recently slashed 3G tariffs ... the stock prices of these companies were down.”
Last week, Bharti Airtel had announced cuts for its third generation (3G) high speed internet services.
The price war comes at a time when operators are up in arms over the regulator Trai’s recent recommendations on spectrum auction. They have warned that mobile bills could increase by up to 100 per cent in certain circles if the proposals are accepted.
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