Telecom Stocks Outlook for the week – 06 to 10.06.2016
The shares of mobile service providers are seen trading positive
in the coming week, with sector heavyweight Bharti Airtel Ltd expected to lead the
gains. Further cues will be provided by the outcome of a meeting of the Telecom Commission
on Tuesday, at which the final contours of the spectrum auction will be
discussed, along with the Attorney General's view on spectrum user charges.
Some clarity on spectrum user charges emerged after Attorney
General Mukul Rohatgi told the Department of Telecommunications that it did not have the
power to make any changes to the 1% spectrum user charge that broadband wireless
access providers will have to pay for spectrum acquired in the 2010 auction.
During that auction, Reliance Jio Infocomm Ltd, the mobile
services arm of Reliance Industries Ltd, won pan-India broadband wireless access spectrum.
Rohatgi's statement is in response to the department seeking his view on its proposal
to junk the current 3- 8% slab system in favour of a uniform 4.5% for all mobile
services. Through the next week, Bharti Airtel could extend the gains of 2%
it recorded this week. The company was well-positioned to maintain its market
leadership position due to its integrated telecom operations, ownership of efficient
spectrum assets, and ability to offer pan-India 3G and 4G services.
The share price of Bharti Airtel has outperformed peers over the
past several months and is showing early signs of a fresh upward momentum in the
stock, offering a trading opportunity.
