INTRODUCTION:

Indian Telecom Industry:

India’s telecommunication network is the second largest in the world based on the total number of telephone users (counting fixed line and mobile phones). It has one of the lowest call tariffs in the world empowered by the mega telephone networks and hyper-competition among them. It has the world’s third-largest Internet user-base. According to the Internet and Mobile Association of India (IAMAI), the Internet user base in the country stood at 190 million at the end of June 2016.

Main sectors of the Indian telecommunication industry are telephony, Internet and television broadcast Industry in the nation that is in an on going procedure of relocating into next generation network, employs an wide spread arrangement of modern network essentials such as digital telephone exchanges, mobile switching centers, media gateways and signaling gateways at the core, interrelated by an extensive variety of transmission systems using fiber-optics or Microwave radio relay networks. The access network, which links the subscriber to the core, is highly varied with different copper-pair, optic-fiber and wireless technologies. DTH, a comparatively new broadcasting technology has accomplished significant acceptance in the Television segment. The outline of private FM has given a flip to the radio broadcasting in India. Telecommunication in India has significantly been reinforced by the INSAT system of the country, one of the principal domestic satellite systems in the world. India enjoysa diversified communications system, which joins all parts of the nation by telephone, Internet, radio, television and satellite.

Indian telecom industry experienced a high pace of market liberalization and development since the 1990s and now has become the world’s most modest and one of the fastest growing telecom markets. The industry has fully-fledged over twenty times in just ten years time duration, from under 37 million subscribers in the year 2001 to over 846 million subscribers in the year 2011. India has the world’s second-largest mobile phone user base with over 1529.45 million users as of May 2017. It has the world’s second-largest Internet user-base with over 450 million as of January 2017.

The total revenue of the Indian telecom sector raised by 10% to Rs. 3243 billion for 2015-16 financial year, while revenues from telecom equipment segment mounted at Rs. 1356 billion.

Telecommunication has reinforced the socioeconomic development of the country and has played a vigorous part to narrow down the rural-urban digital divide to some degree. It also has aided to upsurge the transparency of governance with the overview of e-governance in India. The government has realistically cast-off modern telecommunication facilities to bring mass education programmer for the rural folk of India.

Dividend Policy:

Dividend policy is a key financing decision that encompasses with the imbursement to share holders in return of their funds. The term dividend denotes to that proportion which is dispersed amid the share holders of the firm. Dividends may send information about the company. Each firm functioning trails some kind of dividend payment pattern or dividend policy and seemingly it is a financial pointer of the firm. Demand of the firm’s share should be upto some degree, reliant on on the firm’s dividend policy. Dividend policy still relics an academic discussion amid the clouding picture of its importance among the financial economists till today. The firm has to balance between the growth of the company and the distribution to the shareholders. It has a critical influence on the value of the firm. It also has to strike a balance between the long term financing decision and the wealth maximization.

This study covers various companies for studying the relationship between dividend policy and share price. The companies undertaken for study are Reliance Communications, Bharti Airtel, MTNL and Tata Communications.

LITERATURE REVIEW:

Maharshi, Dr. Niharika (2015) The study is focused to empirically observe the causes of dividend spreading by firms and find out its association with material content of dividends. The Researcher determined that dependency of price volatility on other variables is location explicit but also be contingent on the edifice of market. Farhat (2015) directed a study on “Relationship between dividend policy and share price” The share price from eight most prevalent companies, HDFC, Colgate Palmolive (India) Ltd, Asian Paints, ITC, Pidilite industries, Dabur India limited, Procter and Gamble Hygiene and Healthcare Ltd. and page industries are the emphasis of this training by captivating the share price. The supposition was assumed that dividend does not mark the value of share in other words there is no association among the price of share and dividend policy. The main findings are that dividend policy i.e. splitting of total net profit into dividend and retain earnings is not at all a conclusive influence for stock price behavior in information technology sector under the present study. Al Masum, Abdullah (2014) steered a study on “Dividend Policy and Its Impact on Stock Price–A Study on Commercial Banks Listed in Dhaka Stock Exchange” The objective of the study was to examine the relationship among Dividend Policy and Stock Price of thirty commercial banks of Bangladesh listed in Dhaka Stock Exchange from 2007 to 2011. Lashgari. Dr. Zahra and Ahmadi, Mousa (2014) have scrutinized the influence of dividend policy on share price volatility in Tehran Stock Exchange. The result specifies at the error level on 5%, Dividend payout ratio has a expressively negative effect on stock price volatility and as set growth rate has a meaningfully positive consequence on stock price volatility. Also variables leverage, earning volatility and company size on stock price volatility is not noteworthy result. The key objective of this study is to observe the influence of dividend payout ratio on the share price volatility in Tehran Stock Exchange. The empirical result proposes there is a noteworthy negative effect among the dividend payout ratio of a firm and share price volatility. Ilaboya, O.J and Aggreh, M (2013) considered the association amongst dividend policy and share price volatility across companies listed in the Nigerian Stock Exchange Market. 26 sampled firms across a number of sectors were nominated through simple random sampling technique over a period (2004–2011). The finding specified that dividend yield employs a positive and significant impact on share price volatility of firms while dividend payout applies a negative and insignificant impact on share price volatility. Hashemijoo, Mohammad (2012) The purpose of this study was to observe the relationship between dividend policy and share price volatility with a emphasis on consumer product companies listed in Malaysian stock market. The empirical outcomes of this study presented significant negative relationship between share price volatility with two main measurements of dividend policy, which are dividend yield and dividend payout. Moreover, a noteworthy negative relationship between share price volatility and size is found. Based on findings of this study, dividend yield and size have most influence on share price volatility amongst predictor variables. Nazir, Mian Sajid (2012) The main purpose of this study is to determine the consequence of dividend policy on the volatility of stock prices of the financial sector companies of Pakistan listed in the Karachi Stock Exchange after monitoring for earning volatility, assets growth, firm size and leverage. The results presented that there is momentous negative association among dividend yield and price volatility and also between dividend payout and price volatility in KSE listed firms. The study specifies that dividend policy is an imperative tool in setting share prices in developing economy like Pakistan. Kapoor, Sujata (2009) -shown a study on “Impact of dividend policy on shareholders’ value: a study of Indian firms” Dividend policy has been a matter of curiosity in financial literature since Joint Stock Companies came into being. The results in the FMCG sector are in configuration with Brave et.al that managers are very disinclined to cut dividends once they are originated. This hesitancyprimes to dividends that are sticky, levelled from year to year and tangled to long run profitability of the firm. R. Murhadi, Werner (2008) This research purposes to test dividend signaling theory in an Indonesian capital market. Signaling theory positions that dividend policy has information content that can impact the share price. Examination of theory of signaling is connected to research phenomena in other countries representing that the percentage of the companies which pay dividend got reduced and even in certain companies no dividend is paid. Examination of theory of signaling is also associated to the exploration result screening the existence or inexistence of the impact of dividend policy to share price.

OBJECTIVES:

The objectives of this study are:

1. To study the relationship amongst dividend policy and share price.

2. To determine the impact of dividend on share prices of companies in telecommunication sector.

This study covers numerous companies for reviewing the relationship between dividend policy and share price. The companies assumed for study are Reliance communications, Bharti Airtel, MTNL, Tata communications.

METHODOLOGY:

The study is chiefly focused on establishing and identifying inspiration of dividend policy on share price. The given study is examining the influence of these innovations in the telecom sector, which can be verified by glancing at the connotation and consequence of dividend policy on the share prices of selected Indian companies. The companies assumed for study are Reliance Communications, Bharti Airtel, MTNL and Tata Communications. The data is taken from secondary source, therefore legitimacy of the data is reliant on the correctness of the information used. The time period selected under study is 2010-2016. The consequences and clarification are wholly inflexible and from the view point of researcher. Among the diversefacet of dividend policy only cash dividend is taken for the study.

The analysis is descriptive in nature. The method used for data collection in the study is secondary sources. Secondary data comprises Library search, Internet search, online resources, dissertations etc. Annual report of each company composed as a source of secondary data. This is a descriptive research where in quantitative research technique is used. It embraces research design, sample, sources and techniques of data collection and data analysis tools. Research methodology deals with a systematic and scientific method that can be approved to solve research problems. Methodology is a vital step in any research because it unswervingly effects the whole research and its conclusions.

Tools And Techniques Used:

T- test is used for data analysis using SPSS and MS- EXCEL as a tool. A t-test is any statistical hypothesis test in which the test statistic pathways a Student's t-distribution under the null hypothesis. It can be used to regulate if two sets of data are meaningfully diverse from each other, and is most generally functional when the test statistic would follow a normal distribution if the value of a scaling term in the test statistic were known. These tools are being used to distinguish the financial position of both the telecom companies and also to know the profitability and turnover of both the companies.

HYPOTHESIS:

A hypothesis is a proposed clarification for a phenomenon. A research hypothesis is the statement shaped by researchers when they venture upon the outcome of a research or experiment.

H₀₌There is no significant difference in share price of selected companies before and after the declaration of dividend.

H₁₌There is significant difference in share price of selected companies before and after the declaration of dividend.

Analysis and Interpretation:

Reliance Communications

Paired Samples Statistics

Table No.1 Paired Samples Statistics

Pair 1		Mean	N	Std. Deviation	Std. error Mean
	Before	230.0250	14	167.34328	44.72437
	After	231.2893	14	172.67864	46.15031

Interpretation:

The above table is Paired Sample Statistics. The table shows that mean (before) is 230.0250 and mean (after) is 231.2893. The number of observation is 14. Std. deviation (before) is 167.34328 and Std. deviation (after) is 172.67864. Std. error mean (before) is 44.72437 and Std. error mean (after) is 46.15031.

Paired Samples Correlations:

Table No.2 Paired Samples Correlations

Pair 1

Before and After

Correlation

Sig.

.999

.000

Interpretation:

This table is Paired Samples Correlations. This is the correlation coefficient of the pair of variables indicated. This shows positive correlation between the two variables. The correlation coefficient can range from -1 to +1, with -1 indicating a perfect negative correlation, +1 indicating a perfect positive correlation, and 0 indicating no correlation at all. The above table shows the correlations between before and after share price. The table shows correlation .999.

Interpretation:

The above table shows mean (before and after) is -1.26429. Std. deviation is 7.92720. The value of t is -5.97. The significance value (2-tailed) is .561. The significance value of Reliance Communications is coming more than 0.05. It means there is significant impact on share prices after declaration of dividend.

Bharti Airtel:

Paired Sample Statistics:

Table No.4 Paired Sample Statistics

Pair 1

Mean

Std. Deviation

Std. error Mean

Before

411.2893

179.20779

47.89530

After

351.9143

54.52757

14.57311

Interpretation:

The above table is Paired Sample Statistics. The table shows that mean (before) is 411.2893 and mean (after) is 351.9143. The No. of observation is 14. Std. deviation (before) is 179.89530 and Std. deviation (after) is 54.52757. Std. error mean (before) is 47.89530 and Std. error mean (after) is 14.57311.

Paired Samples Correlations:

Table No.5 Paired Samples Correlations

Pair 1 Before and After	N	Correlation	Sig.
Pair 1 Before and After	1	.759	.002

Interpretation:

This table is Paired Samples Correlations. This is the correlation coefficient of the pair of variables indicated. This shows positive relationship between the two variables. The correlation coefficient can range from -1 to +1, with -1 indicating a perfect negative correlation, +1 indicating a perfect positive correlation, and 0 indicating no correlation at all. The above table shows the correlations between before and after share price. The before and after correlation is .759.

Interpretation:

The above table shows mean (before and After) is 59.37500. Std. deviation is 142.30405. The value of t is 1.561. The significance value (2-tailed) is 142. The significance value of Correlation of Bharati Airtel is coming less than 0.05. It means there is significant impact on share prices after declaration of dividend.

MTNL

Paired Sample Statistics

Table No.7 Paired Sample Statistics

Pair 1		Mean	N	Std. Deviation	Std. error Mean
	Before	115.7550	10	22.63250	7.15703
	After	114.9750	10	24.14291	7.63466

Interpretation:

The above table is Paired Sample Statistics. The table shows that mean (before) is 115.7550 and mean (after) is 114.9750. The No. of observation is 10. Std. deviation (before) is 22.63250 and Std. deviation (after) is 24.14291. Std. error mean (before) is 7.15703 and Std. error mean (after) is 7.63466.

Paired Samples Correlations:

Table No.8 Paired Samples Correlations

Pair 1 Before and After	N	Correlation	Sig.
Pair 1 Before and After	10	.985	.000

Interpretation:

This table is Paired Samples Correlations. This is the correlation coefficient of the pair of variables indicated. This is a measure of the strength and direction of the linear relationship between the two variables. The correlation coefficient can range from -1 to +1, with -1 indicating a perfect negative correlation, +1 indicating a perfect positive correlation, and 0 indicating no correlation at all. The above table shows the correlations between before and after share price. The table shows correlation .985.

Interpretation:

The above table shows mean (before and After) is. 78000. Std. deviation is 4.27695. The value of t is .577. The significance value (2-tailed) is .578. The significance value of MTNL is coming more than 0.05. It means there is no significant impact on share prices after declaration of dividend.

Tata Communication:

Paired Sample Statistics:

Table No.10 Paired Sample Statistics

Pair 1		Mean	N	Std. Deviation	Std. error Mean
	Before	331.9200	10	123.61221	39.08961
	After	313.8400	10	137.58051	43.50678

Interpretation:

The above table is Paired Sample Statistics. The table shows that mean (before) is 331.9200 and mean (after) is 313.8400. The No. of observation is 10. Std. deviation (before) is 123.08961 and Std. deviation (after) is 137.58051. Std. error mean (before) is 39.08961 and Std. error mean (after) is 43.50678.

Paired Samples Correlations:

Table No.11 Paired Samples Correlations

Pair 1 Before and After	N	Correlation	Sig.
Pair 1 Before and After	10	.980	.000

Interpretation:

Interpretation:

The above table shows mean (before and after) is 18.08000. Std. deviation is 29.52616. The value of t is 10936. The significance value (2-tailed) is 0.85. The significance value of Tata Communications is coming more than 0.05. It means there is no significant impact on share prices after declaration of dividend.

CONCLUSION:

The study pacts with examination of corporate dividend declaration of Telecom firms in India. Since the objective of the study is to study the relationship among dividend policy and share price of selected Telecom Companies in India and to establish whether dividend declared by the companies differ significantly or not for that, four telecom companies had been taken. The share price of 4 companies namely Reliance, Bharti Airtel, MTNL, Tata Communications are the emphasis of this study by captivating the share price before and after declaration of dividend.

According to this study, the researcher examined that out of four Telecom Companies, all three companies are screening same result that there is no significant influence of dividend declaration on share price. Only one Telecom Company is best owing that there is significant impact of dividend policy on share price. So, upholding optimum use of dividend policy is vital. As, Dividend Per Share (DPS) is a inspiring factor in the Indian financial sector, which is robust adequate to increase or decrease market price per share of the companies. Thus the study discovers that the dividend paying companies are large, profitable and growth rate of the firm does not seems to deter the dividend payment. Therefore, it can be stated that the dividend announcement is good for edifice the image of a company in the market but it does not have momentous effect on share price. Sector specific analysis discloses that there is no significant difference in effect of dividend before and after declaration of dividend. The individual investors are not using dividend to make investment decision. Therefore, it can be resolved that dividend announcement is immaterial to investment decision.

LIMITATIONS:

There is barely any study steered without the research come across some limitations. This study is therefore not without its limitations. Many corporations do not pay dividends. The intention of the researcher is to conduct a research with reliable findings. In trying to do that, only companies with regular dividend payments for the study period were selected. In doing that, however, four companies from telecom industry are selected. The data collected provided that with certain inconsistencies as the data available on websites may not be precise. The study is examining the influence for a specific eight years for Telecom industry, if the same study is recurrent for a longer period of time the influence may vary. The analysis did not ponder unlisted companies which could give further signal as to the relationship amongst the variables.

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Received on 07.01.2019 Modified on 20.01.2019

Res. J. Humanities and Social Sciences. 2019; 10(3):907-912.

DOI: 10.5958/2321-5828.2019.00149.9

		Paired Differences					T	Df	Sig. (2-tailed)
		Mean	Std. Deviation	Std. Error Mean	95% Confidence Interval of the Difference
		Mean	Std. Deviation	Std. Error Mean	Lower	Upper
Pair 1	Before–After	-1.26429	7.92720	2.11863	-5.84132	3.31275	-5.97	13	.561

		Paired Differences					T	Df	Sig. (2-tailed)
		Mean	Std. Deviation	Std. Error Mean	95% Confidence Interval of the Difference
		Mean	Std. Deviation	Std. Error Mean	Lower	Upper
Pair 1	Before–After	59.37500	142.30405	38.03236	-22.78891	141.53891	1.561	13	.142

		Paired Differences					T	Df	Sig. (2-tailed)
		Mean	Std. Deviation	Std. Error Mean	95% Confidence Interval of the Difference
		Mean	Std. Deviation	Std. Error Mean	Lower	Upper
Pair 1	Before–After	.78000	4.27695	1.35249	-2.27955	3.83955	.577	9	.578

		Paired Differences					T	Df	Sig. (2-tailed)
		Mean	Std. Deviation	Std. Error Mean	95% Confidence Interval of the Difference
		Mean	Std. Deviation	Std. Error Mean	Lower	Upper
Pair 1	Before–After	18.08000	29.52616	9.33699	-3.04174	39.20174	10936	9	0.85