Bharti Airtel, Idea Cellular, RCom shares gain after Trai asks Reliance Jio to withdraw 3-month offer
NEW DELHI: Shares of telecom players were trading higher in early trade on Friday after telecom regulator Trai on Thursday ordered Mukesh Ambani-led Reliance Jio to withdraw the three-month ‘complimentary’ offer of unlimited data usage and free calls on payment of a minimum Rs 303.
Cheering the development, the BSE Telecom index was trading 1.24 per cent up at 1259.55 around 9.25 am (IST). Bharti Airtel and Idea Cellular were up by 1.86 per cent and 2.60 per cent, respectively.
Reliance Communication was up 0.25 per cent at Rs 40.25 around 9.30 am (IST).
The order came days after Jio announced that it has registered 72 million paid users and is extending its one-time Rs 99 payment membership programme Prime for 15 more days till April 15.
Reliance Jio said it accepts Trai's decision and is in the process of “fully complying” with the regulator's advice. Shares of oil-to-telecom conglomerate Reliance Industries were trading 0.78 per cent down at Rs 1427.10 at around the same time.
According to UBS, incumbents have highlighted that the impact of Jio was bottoming out. Operational indicators like subs additions, data usage showed gradual improvement since January. “Overall the fourth quarter result for FY17 will continue to be weak due to the “full quarter” impact of Jio. We see gradual revenue recovery from 1Q-2QFY18 onwards and continue to prefer Bharti Airtel among the telecom players,” said UBS.
BSE benchmark Sensex was trading 102.65 points, or 0.34 per cent lower, at 29,824.69 in morning trade.
On the upcoming quarterly results of telecom players, ICICI Securities in a research report said, “Q4FY17 performance of telecom operators would be impacted by free services offer from Reliance Jio on the higher subscriber-base and reset of higher-value ARPU subscribers with higher allowances on lower packs by Bharti Airtel and Idea Cellular.
“Though increasing adoption of bundled packs makes realisations redundant, we expect realisations to collapse by around 20 per cent QoQ for voice and data services. RCom, Aircel and Tata Tele are likely to report much steeper revenue drop compared to the top-3 players.” the brokerage house said.
Cheering the development, the BSE Telecom index was trading 1.24 per cent up at 1259.55 around 9.25 am (IST). Bharti Airtel and Idea Cellular were up by 1.86 per cent and 2.60 per cent, respectively.
Reliance Communication was up 0.25 per cent at Rs 40.25 around 9.30 am (IST).
The order came days after Jio announced that it has registered 72 million paid users and is extending its one-time Rs 99 payment membership programme Prime for 15 more days till April 15.
Reliance Jio said it accepts Trai's decision and is in the process of “fully complying” with the regulator's advice. Shares of oil-to-telecom conglomerate Reliance Industries were trading 0.78 per cent down at Rs 1427.10 at around the same time.
According to UBS, incumbents have highlighted that the impact of Jio was bottoming out. Operational indicators like subs additions, data usage showed gradual improvement since January. “Overall the fourth quarter result for FY17 will continue to be weak due to the “full quarter” impact of Jio. We see gradual revenue recovery from 1Q-2QFY18 onwards and continue to prefer Bharti Airtel among the telecom players,” said UBS.
BSE benchmark Sensex was trading 102.65 points, or 0.34 per cent lower, at 29,824.69 in morning trade.
On the upcoming quarterly results of telecom players, ICICI Securities in a research report said, “Q4FY17 performance of telecom operators would be impacted by free services offer from Reliance Jio on the higher subscriber-base and reset of higher-value ARPU subscribers with higher allowances on lower packs by Bharti Airtel and Idea Cellular.
“Though increasing adoption of bundled packs makes realisations redundant, we expect realisations to collapse by around 20 per cent QoQ for voice and data services. RCom, Aircel and Tata Tele are likely to report much steeper revenue drop compared to the top-3 players.” the brokerage house said.
