Telecom Sector Weekly Report – 13.11.2017 To 17.11.2017
Telecom Sector Weekly Report – 13.11.2017 To 17.11.2017
Stocks of most telecommunications companies are seen falling next week as competitive intensity in the sector remains high after the entry of Reliance Jio Infocomm Ltd. The country's third largest operator Idea Cellular Ltd is expected to report a consolidated loss, the fourth consecutive quarter of loss in a row, as the continuing pressure on revenue and subscriber base from low priced-offerings
of Reliance Jio.
Stock of Bharti Airtel has seen volatility in the last two weeks. After its Jul-Sep earnings beat expectations, on Nov 1, the stock hit its highest level in a decade as investors bet on a turnaround in the company's fortunes because of a rise in data tariff and subscriber addition. On Wednesday, however, the stock ended down 3.7% on the National Stock Exchange after reports said that Three Pillars, an affiliate of the Qatar Foundation, had sold its entire 5% stake in the company in a bulk deal. The last one year has been turbulent for telecom operators after the entry of Reliance Jio, which
offered free services for almost seven months and later announced rock bottom tariffs. Meanwhile,
the government expects to soon receive the additional solicitor general's opinion on the interministerial panel's report on financial stress in the sector, after which the report will be sent for the approval of the Cabinet. To boost liquidity for telecom operators, the Telecom Commission in September approved increasing the time period for operators to pay for the spectrum bought in auctions to 16 years from 10 years, in line with the suggestion of the inter-ministerial panel. It also approved a cut in the interest rate on penalty for delayed payment on spectrum usage charges and licence fee payment. The current consolidation in the sector is also expected to lead to a more efficient industry; as ultimately, it is seen resulting in three strong private entities and a government-run public sector company. While Idea Cellular and Vodafone India have announced a merger, Bharti Airtel last month announced it will take over the telecom operations of Tata group. Bharti Airtel has already completed the acquisition of Tikona Digital Networks, while the approval process for the merger with Telenor India is expected to complete by Jan-Mar.
Source : Cogencis Information Services Ltd.
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Telecom Sector Weekly Report – 13.11.2017 To 17.11.2017
Stocks of most telecommunications companies are seen falling next week as competitive intensity in the sector remains high after the entry of Reliance Jio Infocomm Ltd. The country's third largest operator Idea Cellular Ltd is expected to report a consolidated loss, the fourth consecutive quarter of loss in a row, as the continuing pressure on revenue and subscriber base from low priced-offerings
of Reliance Jio.
Stock of Bharti Airtel has seen volatility in the last two weeks. After its Jul-Sep earnings beat expectations, on Nov 1, the stock hit its highest level in a decade as investors bet on a turnaround in the company's fortunes because of a rise in data tariff and subscriber addition. On Wednesday, however, the stock ended down 3.7% on the National Stock Exchange after reports said that Three Pillars, an affiliate of the Qatar Foundation, had sold its entire 5% stake in the company in a bulk deal. The last one year has been turbulent for telecom operators after the entry of Reliance Jio, which
offered free services for almost seven months and later announced rock bottom tariffs. Meanwhile,
the government expects to soon receive the additional solicitor general's opinion on the interministerial panel's report on financial stress in the sector, after which the report will be sent for the approval of the Cabinet. To boost liquidity for telecom operators, the Telecom Commission in September approved increasing the time period for operators to pay for the spectrum bought in auctions to 16 years from 10 years, in line with the suggestion of the inter-ministerial panel. It also approved a cut in the interest rate on penalty for delayed payment on spectrum usage charges and licence fee payment. The current consolidation in the sector is also expected to lead to a more efficient industry; as ultimately, it is seen resulting in three strong private entities and a government-run public sector company. While Idea Cellular and Vodafone India have announced a merger, Bharti Airtel last month announced it will take over the telecom operations of Tata group. Bharti Airtel has already completed the acquisition of Tikona Digital Networks, while the approval process for the merger with Telenor India is expected to complete by Jan-Mar.
Source : Cogencis Information Services Ltd.
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