The Indian mobile sector, a darling of the Indian stock markets has just fallen from grace. Fears that a renewed tariff war may bring its dream run of profit growth to an end and could force smaller players to sell out or shut shop has caused the leader, Bharti Airtel to lose 17% in two trading sessions. Reliance Communications has fallen 11% and Idea Cellular fell 8%.

Mobile tariffs in India are already the lowest in the world. On Monday, Reliance (RCOM) announced the slashing of tariffs across the board for local, roaming and long-distance calls to 50 paise, i.e under a cent per minute.

In addition to this, the Indian Telecom regulator suggested on Monday that telecom operators shift to per-second pricing as opposed to per-minute. After the Indian stock market got jittery with this announcement and telecom stocks started tumbling, the regulator (TRAI) was seen as diluting their position on this statement, stating that proposal on per-second billing was at an initial stage and too much was being read into the issue.

TRAI chairman J.S. Sarma also said that mobile operators were free to oppose the scheme and the regulator would consider their opinion during the consultation process.

Sunil Mittal, the chief of Bharti Airtel said tariffs were best left to market forces.