Bharti cmp: 320
RCom cmp: 180
Idea cmp: 50
MTNL cmp: 70
Telecom sector which was the favorite of many investors and traders seem to be a forgotten story now. When the Bharti-MTN deal got cancelled, people jumped into buying the stock on the morning of 1st Oct at 6% gap-up opening at 450. Everybody thought that the wrost is over for Bharti and many brokerage house called it a big thumbs up for Bharti. Incidentally, we asked to buy Oct 400 puts at 3 rs. On expiry that traded at a whopping 80 rs and put value had actually given 600% return in 1 day.
Once the crash came in Bharti the very next day on bouts profit booking, the Telecom Minister, Mr. A. Raja urged all operators to come up with a 1p/sec tariff. Wow!!!! What a benefit for customers. And alas !!! The conclusion came......All telecom operators are going to face huge losses on account of reduced tariff rates and that their balance sheet will suffer due to THIS.....Really??? Lets think.....
True it may be that their competition is getting stiffer day by day. From only BSNL/MTNL came Bharti and Hutch. And now we have Idea, Aircel, RCom, TataDocomo and so many others trying to bring technological revelution among 130 crore Indian population....Definitely, we will see consolidation in the industry and that in one way is appicable for any industry, be it, metal, aviation or anything.... Mergers and buyouts is an inherent part of any industry. Let it be like that....
Now, lets analyze the 1p/sec tariff. When you call up your friends or relatives, what is the smallest duration that you speak. How many times the duration is of only a few seconds. Hardly 5 times a month. Even when we speak only what is necessary, the average duration generally comes like 1 min 15 sec or 2 mins 15 sec. Isn't it?Now, what is the normal rates charges by all operators. I guess 30p to 50p per min on a 1 min pulse.Say, you speak for 2 min 15 sec.On the normal 40p tariff, you end up paying Rs.1.20 for a 3 min pulse. And in the new 1p/sec tariff, you actually end up paying Rs.1.35 which is costlier and if that speech ends up near to the complete min, you pay even more......
So, what is perceived may not be the actual.....Isn't it....So, next time when Shahrukh Khan comes on TV and says "how long it takes to say 'I love u'" and asks us to subscribe for the 1p/sec tariff, "Be cautious"....When you say the same will you stop speaking in 5 secs. I guess, if you do that, that love will never come.....Hahaha.....Also remember, if the deal would actually been a loss making proposal for the telecom companies, they would not have spent so much money on advertisement for the same......Isn't it.....
Remember one thing, when the worst is coming in any sector and the global houses are degrading the sector, do not be fearful always. Had the management of Bharti/Rcom/Idea sold their holdings in the open market, you should have been fearful. Instead, they actually increased stake in the companies. Why should they? After all, its their business and they know it better than us. With the advent of 3G and then 4G, Indian telecom companies have a long way to go. Do you know that the average download speed in Korea is 33 Mbps whereas in India its only 180kbps. The revolution is yet to come. I would not be surprised to see these stocks becoming a few bagger in days to come. Hold and accumulate them for the future.....
RCom cmp: 180
Idea cmp: 50
MTNL cmp: 70
Telecom sector which was the favorite of many investors and traders seem to be a forgotten story now. When the Bharti-MTN deal got cancelled, people jumped into buying the stock on the morning of 1st Oct at 6% gap-up opening at 450. Everybody thought that the wrost is over for Bharti and many brokerage house called it a big thumbs up for Bharti. Incidentally, we asked to buy Oct 400 puts at 3 rs. On expiry that traded at a whopping 80 rs and put value had actually given 600% return in 1 day.
Once the crash came in Bharti the very next day on bouts profit booking, the Telecom Minister, Mr. A. Raja urged all operators to come up with a 1p/sec tariff. Wow!!!! What a benefit for customers. And alas !!! The conclusion came......All telecom operators are going to face huge losses on account of reduced tariff rates and that their balance sheet will suffer due to THIS.....Really??? Lets think.....
True it may be that their competition is getting stiffer day by day. From only BSNL/MTNL came Bharti and Hutch. And now we have Idea, Aircel, RCom, TataDocomo and so many others trying to bring technological revelution among 130 crore Indian population....Definitely, we will see consolidation in the industry and that in one way is appicable for any industry, be it, metal, aviation or anything.... Mergers and buyouts is an inherent part of any industry. Let it be like that....
Now, lets analyze the 1p/sec tariff. When you call up your friends or relatives, what is the smallest duration that you speak. How many times the duration is of only a few seconds. Hardly 5 times a month. Even when we speak only what is necessary, the average duration generally comes like 1 min 15 sec or 2 mins 15 sec. Isn't it?Now, what is the normal rates charges by all operators. I guess 30p to 50p per min on a 1 min pulse.Say, you speak for 2 min 15 sec.On the normal 40p tariff, you end up paying Rs.1.20 for a 3 min pulse. And in the new 1p/sec tariff, you actually end up paying Rs.1.35 which is costlier and if that speech ends up near to the complete min, you pay even more......
So, what is perceived may not be the actual.....Isn't it....So, next time when Shahrukh Khan comes on TV and says "how long it takes to say 'I love u'" and asks us to subscribe for the 1p/sec tariff, "Be cautious"....When you say the same will you stop speaking in 5 secs. I guess, if you do that, that love will never come.....Hahaha.....Also remember, if the deal would actually been a loss making proposal for the telecom companies, they would not have spent so much money on advertisement for the same......Isn't it.....
Remember one thing, when the worst is coming in any sector and the global houses are degrading the sector, do not be fearful always. Had the management of Bharti/Rcom/Idea sold their holdings in the open market, you should have been fearful. Instead, they actually increased stake in the companies. Why should they? After all, its their business and they know it better than us. With the advent of 3G and then 4G, Indian telecom companies have a long way to go. Do you know that the average download speed in Korea is 33 Mbps whereas in India its only 180kbps. The revolution is yet to come. I would not be surprised to see these stocks becoming a few bagger in days to come. Hold and accumulate them for the future.....
1 comment:
do u still bear d same view?
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