Reliance Jio tariff plan announcement takes sheen off telecom stocks; Bharti Airtel plunges 4%
Among the laggards in telecom space, Bharti Airtel was the worst hit, dropping nearly 3 percent to Rs 365.65 with nearly 3 lakh shares changing hands on BSE
Equity markets, after exhibiting a listless trading for most of the trading session, witnessed late buying support, but select large-cap telecom stocks faced investors' wrath after Reliance group unveiled major tariff plans of Reliance Jio that analysts believe has the potential to further disrupt the sector in a big way.
Faced with rising competition, companies like Bharti Airtel reported a huge drop in earnings in the previous quarter, while Idea Cellular registered loss in its earnings for the first time since its inception.
Among the laggards in telecom space, Bharti Airtel was the worst hit, dropping nearly 4 percent to end at Rs 360.55 with nearly 3 lakh shares changing hands on BSE.
Shares of Aditya Birla group company Idea Cellular, too, exhibited weakness, closing nearly 0.4 percent to Rs 108.30.
On the other hand, Reliance Communications bucked the trend, rising 2 percent to Rs 35.30 as the company has initiated merger talks talks with Tata Teleservices.
Tata Teleservices stock, too, has registered strong gains, moving up 2.5 percent to Rs 6.60 on merger talks with Reliance Communications.
In a major announcement today, Reliance group chairman and managing director Mukesh Ambani unveiled tariff plans for Reliance Jio customers, as its existing free service offer will cease to exist on 31 March.
Among the major plans, the company said Reliance Jio subscribers will have to pay Rs 303 per month, or Rs 10 a day, to enjoy all the services for another full year till 31 March, 2018.
Existing and new customers subscribing to Jio services till the end of this month can apply for Jio Prime membership at Rs 99 for the next one year beginning 1 April.
It will be interesting to see in the next few days whether the incumbent telecom operators, too, will announce new schemes to match Jio's offer, as the latter has been adding subscribers at a brisk pace over the last few months. Reliance Jio said the company has reached 100 million subscribers.
(Disclosure: Reliance Jio is owned by Reliance Industries, who also own Network18, the publisher of Firstpost)
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