Telecom stocks open in red as TRAI moves to cut international call termination rates to 30 paise

Telecom stocks opened in red today as the telecom regulatory body moved to cut international call termination rates to 30 paise per minute. The decision of TRAI is estimated to hurt Indian operators even more so in the face of tough competition.

Shares of the telecom operators opened with very little change to stock prices. Just a few minutes into the early trading session and the shares of the three listed companies – Airtel, Idea Cellular and Reliance Communication were down nearly 1%.

Airtel’s shares were down 0.39% or 2 points to trade at Rs 507.40 per share on the BSE Sensex at 0921 hours.

At 0930, Idea Cellular’s shares were down 1.34% or 1.45 points to Rs 107.15 apiece on the BSE Sensex.

Reliance Communications shares were down 0.48% or 0.15 points to Rs 31.20 apiece on the BSE Sensex in early trade.

Last week, TRAI cut international call termination charges (ITC) to 30 paise from the 53 paise currently with effect from February 1.

This comes on the back of excessive use of data driven apps that allow subscribers to make international calls at a fraction of the cost of a voice call.

The halving of calling charges was estimated to swipe Rs 5,000 crore in revenues from incoming international calls, a report by ET said.

Most of these international calls terminated on Bharti Airtel, Vodafone and Idea’s network.

Indian operators were against the raising of international call termination rates as a sea of calls are made to India.

Nearly 4.5 billion calls originate from India to overseas markets, while 88 billion calls are made to India on an average, Cellulars Association of Operators in India (COAI) report to TRAI revealed.

TRAI had raised the international termination charges to 53 paise per minute from 40 paise in February 2015, while cutting the mobile termination charges to 14 paise per minute from 20 paise per minute.