Telecom Stocks Outlook for the week – 25 to 29.01.2016
Bharti
Airtel, RComm seen trading weak
( www.rupeedesk.in )
Stocks
of major telecom companies, including Bharti Airtel Ltd and Reliance
Communications
Ltd, are seen trading in the negative territory next week due to weak
earnings.
Aditya Birla Group Company Idea Cellular Ltd reported a consolidated net
profit
of 7.64 bln rupees, down 5.6% on quarter and 0.4% on year.
The
company's total revenues rose 3.6% to 90.09 bln rupees. The company's average
data
revenue per user per month for a 3G subscriber fell by 6 rupees to 196 rupees
even
as data usage by the same user rose by 64 megabytes or MBs to 866 MBs--a
clear
indication of pricing pressure in a highly competitive market. As per experts,
all
the
three stocks are at their 52-week low and are likely to shed 5-7% in the
upcoming
week.
Citigroup
is negative on Bharti Airtel as it sees intense competition in the sector after
the
launch of Reliance Jio. Despite a strong market for data growth, the impending
launch
of Reliance Jio Infocomm Ltd's 4G services and the strategy adopted by a deep
pocket
competitor remains the key overhang on the sector. Reliance Communications
Ltd
has signed an agreement with Reliance Jio to share 800 MHz spectrum across 17
circles
to provide high-speed 4G services and also to trade part of its spectrum in
some
circles.