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Telecom Stock Vista

Airtel, Idea and other telecom stocks have fallen, raising questions in investors minds

Should we invest in the telecom sector as the stocks in it are down now, or should we wait?

Telecom sector stocks have been freefalling. The key point is that too many things have been happening at the same time, which is likely to affect the telecom companies negatively. A paradigm shift is envisaged.

However, here is a large sector which has emerged very strongly over the last 5-6 years and there are concerns over the likelihood of expansion at the same pace. Is there a room for maintaining that pace? Competition has taken its toll. This could be reflection time for telecom operators.

But at the same time, I do not think this is a write off situation. There could be a point when telecom shares would look very cheap. The decline that we have seen may just be a re-alignment in the face of the fact that these companies are not expected to be as robust in their earnings growth as they were in the past.

Going by the downward spiral, which we are seeing and if it continues apace even for a short while, many companies might look very attractive. The large players have a certain advantage and revenue. The revenue per user being down is one aspect. The other is that too many other companies are entering the sector.

I think these are still side issues. Going by the technologies and the way they are changing and new ones evolving, all these companies can spring a surprise.

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