Telecom Sector Analysis

Over the last 1 year Telecommunication sector has seen a great plunge.Stocks like Bharti Airtel corrected by 40%(CMP Rs 302), Idea corrected by 70%(CMP Rs 30), Tata communications corrected by 30%(CMP Rs 505). Reasons being firm competition seen from Reliance Industries after the advent of JIO. Reliance having the reputation of being a company for the people has done its best to provide low cost carrier service to the citizens of the country. Cheap data, low cost voice calls service from JIO has attracted a lot of customers to join the JIO family. Of course this has caused some revenue losses to other Telecos who have lost their clients to JIO after the advent of Mobile Number Portability. But if we carefully observe it is going to be a mighty task for JIO to service the clients of a country which has a population of more then 1.2 billion. We will need more service providers who can offer better service to the clients so that complete load of telecommunication sector would not fall on the shoulders of Reliance. So after understanding this we have seen Bharti Airtel has been an outperformer over a period of time in this sector. Good customer service, Reasonable Tariffs, Network reach in the isolated areas of the country are some of the reasons that have compelled the customers to stay back with Airtel. Quarter results were declared on 31^st January. After a series of losses in March, June and September 2018 Quarters, December quarter results were positive. This in turn gives us a decent idea that Bharti Airtel is on the right track. So as soon as the economic cycle gets better in our country Telecommunication giants will see an upside very soon specifically Bharti Airtel.