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India Connect
Encouraging Sound-bytes from Government
Past week’s India telecom trading — Indian market extended the last week’s rally
(2.9%) as FIIs poured in US$1bn+ in first four days of the week. Bharti didn’t
participate in the rally with a lot of positives having already been built into the stock
price. It ended the week down 5% after hitting Rs400 in early part of the week,
reflecting that near-term upside now appears limited. Idea posted a decent 2%,
while RCOM reversed its recent decline to rise 1.3% in the week.
Resolution of telecom issues by October? — Telecom minister Kapil Sibal has
asserted that all the outstanding issues (licensing, spectrum allocation, tariffs, rollout obligations, M&A rules, spectrum sharing/trading) currently confronting the
telecom sector would be resolved by October. The minister has set 2011 end as the
deadline for readying the New Telecom Policy.
Exit barriers to be lowered —The telecom ministry is mulling creating an exit route
for telecom licensees who wish to surrender their licenses and the spectrum. This
policy will aid the smaller new entrants that have been unable to create viable
business and will potentially help reduce competitive intensity in the sector.
Yay to spectrum sharing, Nay to spectrum trading — Media reports indicate that
the New Telecom Policy would allow sharing of spectrum. However, trading in 2G
spectrum would remain prohibited as the spectrum wasn’t allocated at market price.
This is in consonance with TRAI’s recommendations that included allowing
spectrum sharing between operators holding not more than 4.4MHz/2.5 MHz of
GSM/CDMA spectrum.
This week’s outlook — Given the expected bounce-back of the broader market,
expect Bharti and Idea to somewhat underperform (mix of defensiveness and
outperformance YTD). RCOM’s catalyst continues to remain tower sale related
news flow.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
India Connect
Encouraging Sound-bytes from Government
Past week’s India telecom trading — Indian market extended the last week’s rally
(2.9%) as FIIs poured in US$1bn+ in first four days of the week. Bharti didn’t
participate in the rally with a lot of positives having already been built into the stock
price. It ended the week down 5% after hitting Rs400 in early part of the week,
reflecting that near-term upside now appears limited. Idea posted a decent 2%,
while RCOM reversed its recent decline to rise 1.3% in the week.
Resolution of telecom issues by October? — Telecom minister Kapil Sibal has
asserted that all the outstanding issues (licensing, spectrum allocation, tariffs, rollout obligations, M&A rules, spectrum sharing/trading) currently confronting the
telecom sector would be resolved by October. The minister has set 2011 end as the
deadline for readying the New Telecom Policy.
Exit barriers to be lowered —The telecom ministry is mulling creating an exit route
for telecom licensees who wish to surrender their licenses and the spectrum. This
policy will aid the smaller new entrants that have been unable to create viable
business and will potentially help reduce competitive intensity in the sector.
Yay to spectrum sharing, Nay to spectrum trading — Media reports indicate that
the New Telecom Policy would allow sharing of spectrum. However, trading in 2G
spectrum would remain prohibited as the spectrum wasn’t allocated at market price.
This is in consonance with TRAI’s recommendations that included allowing
spectrum sharing between operators holding not more than 4.4MHz/2.5 MHz of
GSM/CDMA spectrum.
This week’s outlook — Given the expected bounce-back of the broader market,
expect Bharti and Idea to somewhat underperform (mix of defensiveness and
outperformance YTD). RCOM’s catalyst continues to remain tower sale related
news flow.
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