Price wars and a new proposal from the government regulator sent telecom stocks downward on Tuesday. Bharti shares dropped 10.76%, while Reliance Communications went down 10.61% and Idea Cellular lost 8.02%. Earlier Tata Teleservices had introduced a billing plan that would charge by the second and Reliance Communication followed with a 50 paise tariff plan on Monday. But with the Telecom Regulatory Authority of India proposing to make charging by the second mandatory, some investors fear the entire sector could see its margins fall.
Meanwhile Zain Telecom says it has stopped negotiations on selling its African operations after a request from potential buyers of the company. Currently companies including MTNL and BSNL in India have said they’re interested in being part of a 46% stake purchase of Zain.
Bharti’s merger deal with South Africa’s MTN may have fallen through, but India’s largest telecom firm says it will continue to look for opportunities in emerging markets. The company has declined to comment on whether it is eyeing an acquisition in Zain Telecom.
An IMF official has said the organisation could increase its India growth forecast to 6.8% for the fiscal year 2010-11. India’s growth rate slowed down to 6.7% in 2008-09 and the IMF projects a 5.8% growth in the current fiscal.
Parle Products may already be selling its food products in many countries, but the company now wants to set up more overseas factories as well. It’s started manufacturing in Nepal and Bangladesh and is looking to set up units in African countries. Parle wants to increase the share of its overseas sales from the current 4% to 10%. The company already sells it biscuits and candy in Africa, South-East Asia and North America besides cornering 40% of India’s market for biscuits.
The Gangavaram Port in Andhra may borrow up to Rs700 crore from banks as part of its plans to add two new berths. A company official says they will decide on the borrowing in the next two to three months. Gangavaram Port has five berths at present and has spent 1,800 crore rupees in the first phase of construction.
The Jawaharlal Nehru Port Trust will cancel an auction for a contract to develop a new Rs600 crore container terminal. The decision to scrap the auction comes after delays caused by court cases and poor bidder response.