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Telecom stocks are expected to trade in a range next week and consolidate around current levels ahead of the Jul-Sep earnings of the companies, due to be released in the coming two weeks. Idea Cellular is set to announce its Jul-Sep earnings on Thursday, while Bharti Airtel will declare its results on Oct 30. The Jul-Sep quarter is seasonally the weakest for Indian telecom operators, and our interaction with stakeholders suggests that the seasonality is getting more pronounced every year. We expect both Idea Cellular and Bharti Airtel to outperform. After the recent spectrum valuation and pricing recommendations from Telecom Regulatory Authority of India, expected reforms in the sector, such as a revamp in the framework for levying penalties as well as the new mergers and acquisition guidelines, likely to be unveiled in mid-October, is keeping the overall sentiment positive for the sector.
Looking beyond the Q2 (Jul-Sep) results, we see further clarity on the regulatory front (M&A guidelines, spectrum trading, etc) even as auction for 1800MHz and 900Mhz spectrum is likely to get delayed to Dec'13/ Jan'14 due to clarifications sought by Telecom Commission on the current TRAI recommendations.
Telecom stocks are expected to trade in a range next week and consolidate around current levels ahead of the Jul-Sep earnings of the companies, due to be released in the coming two weeks. Idea Cellular is set to announce its Jul-Sep earnings on Thursday, while Bharti Airtel will declare its results on Oct 30. The Jul-Sep quarter is seasonally the weakest for Indian telecom operators, and our interaction with stakeholders suggests that the seasonality is getting more pronounced every year. We expect both Idea Cellular and Bharti Airtel to outperform. After the recent spectrum valuation and pricing recommendations from Telecom Regulatory Authority of India, expected reforms in the sector, such as a revamp in the framework for levying penalties as well as the new mergers and acquisition guidelines, likely to be unveiled in mid-October, is keeping the overall sentiment positive for the sector.
Looking beyond the Q2 (Jul-Sep) results, we see further clarity on the regulatory front (M&A guidelines, spectrum trading, etc) even as auction for 1800MHz and 900Mhz spectrum is likely to get delayed to Dec'13/ Jan'14 due to clarifications sought by Telecom Commission on the current TRAI recommendations.
