Telecom Stocks
Outlook for the week 0 11 to 15.07.2016
(Seen falling as DoT
demand notice underway)
Stocks of telecom companies are seen under pressure next
week, as the government is preparing to
issue demand notice to six operators for non-payment of
dues. A report by the Comptroller and
Auditor General of India in March showed that telecom
services providers--Bharti Airtel Ltd, Idea
Cellular Ltd, Reliance Communications Ltd, Vodafone India
Ltd, Aircel Ltd, and Tata Teleservices
Ltd--collectively underreported 460 bln rupees of gross
revenues in the four years from 2006-07 (Apr- Mar) to 2009-10.
The national auditor alleged that during these four years,
the government incurred a loss of 125 bln
rupees in license fee and spectrum usage charge collections.
Subsequently, the telecommunications
department ordered a special audit of telecom companies
named in the Comptroller and Auditor
General's report.
On Thursday, the Department of Telecommunications said the
report was "being vigorously examined and the process of issue of demands for the four financial
years for six operators in 22 licence service areas in consonance with licence agreement is currently
ongoing". On Friday, stocks of the top three listed
operators ended 2.3-3.2% lower on the National Stock Exchange.
