Telecom Stocks Outlook For The Week - 24 To 28.09.2018
Bharti Airtel and Vodafone Idea will likely remain under pressure next week due to concerns that Reliance Jio Info comm's low-priced services will continue to chip away their subscribers and in turn their earnings. This was evident from the Telecom Regulatory Authority of India's subscriber base
data for July, which showed that Reliance Jio, the new entrant in the sector, had added 12 mln
subscribers at the expense of the older operators. We expect this trend to continue over the medium
term, and with tariff showing no signs of recovery, financials of the older operators will continue to be hit by the Reliance Industries Ltd subsidiary. We expect costs of telecom companies to increase further due to weakening of the rupee against the dollar as well as increasing diesel costs and interest rates. This may further put pressure on financials of the sector, already reeling under below-cost services. Investors are likely to wait for the launch of Reliance Jio's 'Jio GigaFiber' service, tariff of which is expected to be lower than its competition.
Source : Cogencis Information Services Ltd.
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Bharti Airtel and Vodafone Idea will likely remain under pressure next week due to concerns that Reliance Jio Info comm's low-priced services will continue to chip away their subscribers and in turn their earnings. This was evident from the Telecom Regulatory Authority of India's subscriber base
data for July, which showed that Reliance Jio, the new entrant in the sector, had added 12 mln
subscribers at the expense of the older operators. We expect this trend to continue over the medium
term, and with tariff showing no signs of recovery, financials of the older operators will continue to be hit by the Reliance Industries Ltd subsidiary. We expect costs of telecom companies to increase further due to weakening of the rupee against the dollar as well as increasing diesel costs and interest rates. This may further put pressure on financials of the sector, already reeling under below-cost services. Investors are likely to wait for the launch of Reliance Jio's 'Jio GigaFiber' service, tariff of which is expected to be lower than its competition.
Source : Cogencis Information Services Ltd.
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