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I dont thik that the NTP will be get this year. because we never heart any latest news about roaming free from telecom sector or from Kapil sibbal after oct 2011....
Telecom Stocks Outlook for the week (21.05.2012-25.05.2012)
Telecom stocks are seen trading rangebound to slightly down next week due to lack of any positive trigger in the near term, market participants said.
The stocks have been trading with a weak bias on account of regulatory uncertainty, with telecom companies strongly opposing the recommendations of the Telecom Regulatory Authority of India on spectrum auction norms.
The stocks are expected to trade weak, tracking the broad market as well, which is expected to fall further with the National Stock Exchange`s 50-Stock Nifty seen slipping below the current levels. The index today ended at 4891.45, up 0.4% from Thursday.
Nifty is expected to fall as much as to 4500-4600 levels, next week, market participants said adding that any upside in the index in the coming sessions is likely to be capped at around 5050 level.
Investors` sentiment on the market remains bearish as inflows from foreign institutional investors have slowed down due to policy paralysis, retrospective tax proposals by the government and also due to the worsening Eurozone debt crisis.
Renewed weakness in the rupee will also keep investors` sentiment subdued. The rupee today fell to an all time low of 54.8950 per US dollar on account of global risk aversion.
Shares of Bharti Airtel, which have declined nearly 14% this year, are expected to find support at around 280 rupees next week, while resistance is seen at 310 rupees, a technical analyst said. Investors may enter the stock at around 260 rupees as valuations look attractive at those levels, a dealer said.
Investors should avoid taking positions on Reliance Communications, the dealer said adding that the stock is likely to fall further in the coming sessions.
However, a technical analyst said the stock at the current levels is oversold and may see some buying in the coming sessions. Support for the stock is seen at 60 rupees and resistance at 71 rupees, the analyst said.
Shares of Idea Cellular are expected to trade in a range with support seen at 75 rupees and resistance at 85 rupees, the dealer said but added that the long-term bias on the stock is negative....
TELECOM: The government has formed an inter-ministerial group to evolve a co-ordinated response to the legal notice sent by Sistema JSFC, Russia ....
MEDIA: The government said there is scope for talks on Telecom Regulatory Authority of India`s recent order limiting television advertisements to 12 minutes an hour....
This seems to be a well sought out strategy by Airtel. Customer acquisition by giving low rates and earn a first mover advantage and by the time other companies drop their rates, TRAI will have announced the increased price for spectrum auction and prices are bound to go up. As a result every Telecom company including Airtel will increase their price. But the added advantage is customer retention will be high because
1. Airtel has good 3G coverage
2. Every company will then be as same price level as others (Yes, once new spectrum prices will be announced Airtel will have to increase its prices steeply in order to cover up for the losses)
This will also lead to an increase in stock price of Airtel which have now been plummeting for sometime.
And just in case TRAI doesn`t hike spectrum price (Unlikely !!!) then Airtel will still have a first mover advantage and will increase the price at later stages though the earned profits will be much lower as compared to previous scenario and stock price movement will be gradual and slugish....
Yes. Telcos are obsess with numbers and volumes. ...
Even as telecom companies are crying hoarse about the TRAI proposals, another round of price war has begun, this time in the 3G segment. Market leader Airtel has cut tariffs across its various 3G services offerings by as much as 70%. Its rivals will have no choice but to follow suit. The price war comes at a time when telecom companies are protesting against the TRAI proposal calling for a steep hike in reserve price for spectrum auction. The companies claim the move will severely erode their profitability, and they will be forced to pass on increased costs to the consumer in the form of higher tariffs. Fourth quarter earnings of listed telecom companies showed a clear strain on operating margins, as most players appear to be trying to increase market share before focusing on the bottomline. One of the reasons cited for the price cut by Airtel is that 3G services in general have been slow in picking up. This is worrying for operators who have shelled out a hefty fee for 3G spectrum. All telecom players grip about pressure on margins due to fierce competition, and yet nobody wants to be the first to raise prices for fear of losing out on market share.
What do you think? Are some of the problems being faced by telecom companies self-created?
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