Telecom Stocks Outlook for the week – 27 to 31.03.2017
Telecom Stocks Outlook for the week – 27 to 31.03.2017
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The shares of telecommunication companies are likely to be stock specific next week. We expect shares of Tata Communications Ltd and Reliance Communications Ltd to rise, and those of Idea Cellular Ltd to trade in a range. Most operators in the telecom sector are facing stiff pricing pressure after the entry of Reliance Jio Infocomm Ltd. The subsidiary of Reliance Industries Ltd initially offered free data and voice services till Mar 31, and has now unveiled aggressive tariff plans staring Apr 1. In a move seen as a response to this tariff war, Reliance Communications has slashed the rates of its data packs. State-run Bharat Sanchar Nigam Ltd, too, announced a pre-paid pack that provides 2GB data per day and unlimited calls within its network at 339 rupees with a validity of 28 days. Reliance Jio could well keep the battle going in the telecom sector as a survey by Bank of America Merrill Lynch released on Wednesday found that 82% of respondents were keen on continuing with their Reliance Jio connections even after the free data and voice services end on Mar 31. The sector will continue to see pressure on operators' average revenue per user for the next few quarters to compete with Reliance Jio's aggressive tariff plans. The price war triggered by the entry of Reliance Jio stresses on operating metrics in the telecom sector. Rising debt levels of the telecom companies are seen weighing on their financial performance for the next financial year, ratings agency ICRA Ltd said on Tuesday. The industry would require debt refinancing in the medium term, it added. Rising consolidation in the sector has also led to consolidation. Bharti Airtel on Thursday announced a definitive agreement with Tikona Digital Networks Pvt Ltd to acquire its 4G business for about 16 bln rupees. This is Bharti Airtel's second acquisition since Reliance Jio entered the telecom sector. On Feb 23, Bharti Airtel had announced it would acquire the spectrum, licences, operations, and employees of the Indian arm of Norway's Telenor ASA. Apart from the industry looking at the possibility of a merger between Bharat Sanchar Nigam and Mahanagar Telephone Nigam, consolidation in the sector is nearing its end. Vodafone India Ltd and Idea Cellular Ltd have also announced a merger, which is pending regulatory approvals. Idea Cellular's board gave its nod for the merger on Monday.
Source : Cogencis Information Services Ltd.
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Telecom Stocks Outlook for the week – 27 to 31.03.2017
( www.rupeedesk.in )
The shares of telecommunication companies are likely to be stock specific next week. We expect shares of Tata Communications Ltd and Reliance Communications Ltd to rise, and those of Idea Cellular Ltd to trade in a range. Most operators in the telecom sector are facing stiff pricing pressure after the entry of Reliance Jio Infocomm Ltd. The subsidiary of Reliance Industries Ltd initially offered free data and voice services till Mar 31, and has now unveiled aggressive tariff plans staring Apr 1. In a move seen as a response to this tariff war, Reliance Communications has slashed the rates of its data packs. State-run Bharat Sanchar Nigam Ltd, too, announced a pre-paid pack that provides 2GB data per day and unlimited calls within its network at 339 rupees with a validity of 28 days. Reliance Jio could well keep the battle going in the telecom sector as a survey by Bank of America Merrill Lynch released on Wednesday found that 82% of respondents were keen on continuing with their Reliance Jio connections even after the free data and voice services end on Mar 31. The sector will continue to see pressure on operators' average revenue per user for the next few quarters to compete with Reliance Jio's aggressive tariff plans. The price war triggered by the entry of Reliance Jio stresses on operating metrics in the telecom sector. Rising debt levels of the telecom companies are seen weighing on their financial performance for the next financial year, ratings agency ICRA Ltd said on Tuesday. The industry would require debt refinancing in the medium term, it added. Rising consolidation in the sector has also led to consolidation. Bharti Airtel on Thursday announced a definitive agreement with Tikona Digital Networks Pvt Ltd to acquire its 4G business for about 16 bln rupees. This is Bharti Airtel's second acquisition since Reliance Jio entered the telecom sector. On Feb 23, Bharti Airtel had announced it would acquire the spectrum, licences, operations, and employees of the Indian arm of Norway's Telenor ASA. Apart from the industry looking at the possibility of a merger between Bharat Sanchar Nigam and Mahanagar Telephone Nigam, consolidation in the sector is nearing its end. Vodafone India Ltd and Idea Cellular Ltd have also announced a merger, which is pending regulatory approvals. Idea Cellular's board gave its nod for the merger on Monday.
Source : Cogencis Information Services Ltd.