Fall in subscribers hurts telecom counters

DALAL STREET SPIKES

Telecom stocks witnessed selling pressure following the decline in the growth of GSM mobile phone subscriber base.

Both Bharti Tele and Mahanagar Telephone Nigam Ltd crashed over 4.5 per cent on Tuesday as funds turned sellers at these counters. Bharti Tele slumped more than 7.5 per cent in intra-day trades to touch a low of Rs 142.60 before closing at Rs 150.90 on the back of a huge volume of 20.19 lakh shares on the Bombay Stock Exchange (BSE).

MTNL, too, ended 4.64 per cent lower to close at Rs 142.55. The growth of the GSM mobile phone sector slowed down in April 2004 with just about a million users signing up in the month because of network and cost constraints.

April subscription had turned out lower than the more than 1.5 million users that entered the GSM-based cellular market in March 2004.

Bharti Tele is a leading GSM-based cellular services provider. Growth happens to be slowing down because operators are not able to generate enough revenue to fund the cost of setting up new or expanding networks to remote areas, reports suggest. Bharti Tele's subscription base at the end of April 2004 was 6.76 users.