Telecom Stocks
Outlook for the week – 08 to 12.09.2014
( www.rupeedesk.in )
Stocks of frontline telecom
companies are seen to remain range bound with a positive
bias with large cap stocks Bharti
Airtel and Idea Cellular remaining bullish. We are
bullish on Bharti Airtel and Idea
Cellular. Mahanagar Telephone Nigam Ltd, which
gained almost 20% last week, is
also expected to remain positive in the coming week.
The telecom stocks are expected
to follow the broader market cues. Over the past few
weeks, stocks of telecom companies
were in line with the broader markets. Markets will
also keep a watch for major
restructuring initiatives announced by the government for the
sector.
The government is looking to
replace Telecom Regulatory Authority of India with a new
super-regulator for the
communications sector, which will be called the Communications
Commission. The government is
also planning to introduce a Communications Bill that
will replace all old and
redundant legislations including the India Telegraph Act and the
TRAI Act.
Amongst regional telcos, Indian
regulations remain the most complex and confusing,
given different circle regimes
and license and access fees. Also, the sector needs more
clarity on a lot of pending
issues such as the roadmap ahead for auctions, spectrum
trading and sharing and merger
and acquisition norms - the new communications bill
could address these issues.
Government also announced
decisions to merge BSNL and MTNL and revive the stateowned telecom firms in a time-bound
manner.
