Telecom Stocks Outlook for the week – 06 to 10.02.2017
Telecom Stocks Outlook for the week – 06 to 10.02.2017
( www.rupeedesk.in )
With most sector analysts terming it a game-changer for the industry, hopes of a merger between Vodafone India Ltd and Idea Cellular Ltd are seen sending stocks of most telecom operators north this week. Consolidation in the sector would lead to fewer, stronger operators to weather the storm kicked off by the entry of Reliance Jio Infocomm Ltd. The telecom arm of Reliance Industries Ltd, shook the industry by offering free data and voice services, leading to concerns over erosion in market share of incumbent operators and fall in average revenue. The long-term outlook looks better than expected after this news of possible consolidation. The near-term pain, however, still remains. We do not expect to see green shoots for at least another year as pressure on tariff will remain. Vodafone Group plc and Idea Cellular had said on Monday that they were in talks for an all share merger of Vodafone India with the latter, which could lead to both companies having an equal stake in the possible merged entity. If the merger goes through, it would result in the merged entity becoming the largest player in terms of market share in the Indian telecom space. Stocks of Idea Cellular have risen over 40% in the last one week. Stocks of Idea could blast further but it is unlikely. They are expected to move sideways as everything is now priced in. We expect the Idea Cellular stock to see more action next week as well. Tata Communications and Bharti Airtel still remain the best bet for trading. Stocks of Reliance Communications are expected to move sideways.
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Telecom Stocks Outlook for the week – 06 to 10.02.2017
( www.rupeedesk.in )
