Telecom Stocks Outlook for the week – 08 to 12.09.2014

Telecom Stocks Outlook for the week – 08 to 12.09.2014

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

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

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.