Doomsday for Telecom Sector?

One of the major contributors to the GDP growth data is telecom sector. There was much despondence among investors when the government was forced to cancel all the telecom licenses issued during 2008 by the Supreme Court. Now according to telecom industry veterans and analysts, the TRAI recommendations for base price for auctioning the much controversial Spectrum is defined as the ‘death knell’ for the telecom industry.

Whether the TRAI recommendations are going to be accepted in-principle by the government or any policy change will save the telecom industry is to be witnessed in the coming months? Irrespective of dual spectrum holdings, all the telecom industry CEO’s have met the telecom minister and the PM by last week and have requested to fully cancel the TRAI recommendations or at least to consult them before taking any policy decisions to save the industry from darling of the market to doomsday precedence. Nonetheless, the telecom stocks are going to witness continuous battering by bears for some time and it’s much better to stay away from the sector investment.

 

Hi

your view on telecom sector to stay away is very good and particularly BHARTI AIRTEL which break the neckline of head and shoulder pattern on weekly chart may invite panic

 

Yeah Pawan. As per the current situation, it is good to stay away because the sector is facing immense pressure. 2G spectrum base prices have been tripled, and mobile operators are facing mounting problems from all possible directions. They are even thinking to hike the call rates by up to 30%. Vodafone has already implemented this to the post paid users in Bombay. We might soon expect the same in other regions also.