Shares in mobile phone operator Axiata Group Bhd dropped as much as 2.24 percent after the end of its domestic roaming agreement between its Malaysian unit Celcom and local peer U Mobile.
"We understand that the loss to Celcom will be to the tune of 40 million r inggit per quarter, or a full year impact which is approximately 2.2 percent of Celcom's 2011 revenue," Affin Investment Bank said in a research note on Thursday.
The loss of this domestic roaming agreement would also dampen Celcom's revenue growth in the fourth quarter of this year, it said.
Adding pressure to Axiata's shares includes the recent suggestion by several Indian cabinet ministers that mobile phone carriers in India should fork out a one-off fee for those holding spectrum above 4.4 megahertz for the remaining period of their 20-year licences.
"If materialised, Axiata's 19.3 percent-owned Idea Cellular would have to fork out 1.3 billion ringgit ($422.90 million) to retain its spectrum," said Affin, maintaining its 'reduce' rating on the stock with a target price of 5.08 ringgit per share.
The counter ended the morning session 2.09 percent lower at 6.57 ringgit per share, underperforming its peers Maxis Bhd's
0.14 percent rise and Digi.com Bhd's 0.37 percent increase. 0620 GMT (Reporting by Yantoultra Ngui in Kuala Lumpur; email@example.com; Editing by Prateek Chatterjee) ($1 = 3.0740 Malaysian ringgit)
Keywords: MARKETS MALAYSIA STOCKSNEWS/AXIATA