Telecom Stocks Outlook for the week – 23 to 27.11.2015
Bharti
Airtel, Idea seen positive next week
Stocks
of most telecom majors are likely to extend their gains in the coming week
after
the
sector witnessed muted movement for several weeks. For the long-term, however,
the
outlook
remains weak. Fitch Ratings yesterday said it has a negative outlook on India's
major
telecom operators. The ratings agency expects the credit profiles of Bharti
Airtel,
Idea
Cellular Ltd, Vodafone India Ltd and Reliance Communications Ltd to come under
pressure
next year due to tougher competition, larger capital expenditure requirements,
and
debt-funded mergers and acquisitions.
Fitch
said the sector's revenue is seen driven by data services since voice services
would
mature
and subscriber growth would witness a slowdown. The agency said it expects the
exit
of unprofitable operators like Videocon Telecom Ltd and Aircel Ltd, given their
unviable
business models. This week, stocks of major telecom companies, barring
Reliance
Communications, traded on a positive note.