Telecom Stocks Outlook for the week – 10 to 14.07.2017
Telecom Stocks Outlook for the week – 10 to 14.07.2017
( www.rupeedesk.in )
The shares of most telecommunication companies are likely to fall next week as negative sentiment
due to pressure on margins and subdued earnings forecast will weigh on the sector. Bharti Airtel's
consolidated earnings before interest, tax, depreciation and amortisation from India operations are
expected to fall 6.6% on quarter to 63 bln rupees in Apr-Jun. Idea Cellular Ltd too could see consolidated EBITDA fall 13% on quarter to 19 bln rupees in Apr-Jun. In what could intensify the battle in the sector further, the telecom subsidiary of Reliance Industries Ltd is expected to unveil its new fourth-generation feature phone targeting rural markets on Jul 21. Reliance Jio first targeted the top of the pyramid; now with the feature phones it will target the bottom. The entry into rural markets will create a new subscriber base which has so far never used data. The pressure on the sector has also triggered consolidation among operators. Vodafone India Ltd and Idea Cellular Ltd have announced a merger, which is pending regulatory approvals. Reliance Communications Ltd's deal with Aircel Ltd to merge wireless business is likely to close by September. Bharti Airtel, too, has announced two separate acquisitions, of Tikona Digital Networks Ltd and the Indian arm of Norway's Telenor ASA. The sector could see more consolidation as Tata Group and Bharti Enterprises have held exploratory talks to form a mega alliance involving their telecom, overseas and enterprise services, and direct-to-home television business. ICRA, in a report last week, said it continues to hold a negative outlook for the sector and does not expect pressure on tariffs to ease "any time soon". The sector will continue to face headwinds due to competition and the industry revenue is expected to come down to 2.4 trln rupees for 2017-18 (Apr-Mar). Taking cognizance of the pressure, the government has set up an inter-ministerial panel to recommend ways to improve the financial health of the sector. The panel has met operators and banks and is expected to come out with its report soon.
Source : Cogencis Information Services Ltd.
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Telecom Stocks Outlook for the week – 10 to 14.07.2017
( www.rupeedesk.in )
The shares of most telecommunication companies are likely to fall next week as negative sentiment
due to pressure on margins and subdued earnings forecast will weigh on the sector. Bharti Airtel's
consolidated earnings before interest, tax, depreciation and amortisation from India operations are
expected to fall 6.6% on quarter to 63 bln rupees in Apr-Jun. Idea Cellular Ltd too could see consolidated EBITDA fall 13% on quarter to 19 bln rupees in Apr-Jun. In what could intensify the battle in the sector further, the telecom subsidiary of Reliance Industries Ltd is expected to unveil its new fourth-generation feature phone targeting rural markets on Jul 21. Reliance Jio first targeted the top of the pyramid; now with the feature phones it will target the bottom. The entry into rural markets will create a new subscriber base which has so far never used data. The pressure on the sector has also triggered consolidation among operators. Vodafone India Ltd and Idea Cellular Ltd have announced a merger, which is pending regulatory approvals. Reliance Communications Ltd's deal with Aircel Ltd to merge wireless business is likely to close by September. Bharti Airtel, too, has announced two separate acquisitions, of Tikona Digital Networks Ltd and the Indian arm of Norway's Telenor ASA. The sector could see more consolidation as Tata Group and Bharti Enterprises have held exploratory talks to form a mega alliance involving their telecom, overseas and enterprise services, and direct-to-home television business. ICRA, in a report last week, said it continues to hold a negative outlook for the sector and does not expect pressure on tariffs to ease "any time soon". The sector will continue to face headwinds due to competition and the industry revenue is expected to come down to 2.4 trln rupees for 2017-18 (Apr-Mar). Taking cognizance of the pressure, the government has set up an inter-ministerial panel to recommend ways to improve the financial health of the sector. The panel has met operators and banks and is expected to come out with its report soon.
Source : Cogencis Information Services Ltd.
