0

0

0

0

0

0

0

0

0

This article is more than 2 year old.

Reliance Jio eyes 500 million users: Does it mean more pain for Bharti Airtel, Vodafone Idea shareholders?

Mini

The Dalal Street on Tuesday will be closely watching how investors react to telecom stocks, particularly Bharti Airtel and Vodafone Idea.

Reliance Jio eyes 500 million users: Does it mean more pain for Bharti Airtel, Vodafone Idea shareholders?
As the new reality of Reliance Jio becoming India’s top most telecom company in terms of revenues, profits and subscribers sinks in, the Dalal Street on Tuesday will be closely watching how investors react to telecom stocks, particularly Bharti Airtel and Vodafone Idea.
The Indian markets will open after a long weekend on Tuesday on account of the Muslim festival of Eid Al Adha on Monday and a day after Reliance Industries Chairman Mukesh Ambani announced at the conglomerate's 42nd AGM that the roughly three-year old Reliance Jio’s subscriber base now stood at over 340 million.
More importantly, Ambani believes that a subscriber base of 500 million is within the company’s grasp as the fully 4G service provider is, on an average, adding 10 million subscribers every month.
Against Jio’s 340 million subscribers, Vodafone Idea reported a decline in subscriber base to 320 million in the June quarter from a subscriber base of 334.1 million in the March quarter. Bharti Airtel reported 320.38 users.
Vodafone Idea has been constantly losing its subscriber base (starting around 400 million users) since Vodafone India and Idea Cellular announced their merger.
The company lost 14 million subscribers in the June quarter, taking the losses in the past year to about 115 million users. On revenue front as well, Vodafone Idea and Bharti Airtel have posted losses compared to Jio.
Not just content with mobile phone subscribers, Relinace Jio Infocomm now is poised to initiate another round of shake-up in the sector in the fixed line and broadband services.
Ambani announced the roll-out of commercial services of Jio GigaFiber from September 5 across the country with tariff plans starting from as low as Rs 750 per month at 100 mbps speed.
Brokerage firm Motilal Oswal, in a research note on Tuesday, said that "unlike wireless launch, we do not see RJio's lowest price plan at Rs 700 as a disruptor. We expect FTTH subscription growth to be gradual due to (a) high enrolment and device cost, (b) the need for household-level connectivity and (c) high incremental network cost."
The brokerage has upgraded RIL to 'buy' from 'neutral' but reiterated target price at Rs 1,400.
As the sector prepares for more churning in the upcoming days, a key to understand investor mood is the one-year comparison of the price movement per share since RIL’s 41st AGM last July.
Investors’ have hedged their bets on the shares of Reliance Industries and Bharti Airtel stock but seem to have drifted away from Vodafone Idea.
Reliance Industries' stock has rallied from Rs 990.1 per share recorded on July 4th 2018 when the oil-telecom-retail conglomerate held its 41st AGM, to Rs 1,162 registered on last Friday, which translates into a rally of over about 17 percent. During the period, it attained a 52-week high price of Rs 1417.50 per share on May 3, 2019.
Bharti Airtel has gained 10 percent from Rs 336.4 per share on July 4th to Rs 371.25 as of its last close on Friday. It trades near its 52-week high price of Rs 378.75 hit on August 8, 2019.
Vodafone Idea has sharply corrected since RIL’s 41st AGM. The stock price of Idea on July 4 quoted at Rs 33.25 and closed at Rs 5.35 per share on Friday, sharply erasing stock value by 84 percent.
The stock has corrected by 76.5 percent in the last one year, with the telco share erasing almost 53 percent of its value in the last one month alone.
On Tuesday, RIL share surged over 11.63 percent to quote at Rs 1297.15 per share on BSE at 10.47 am. Meanwhile, Bharti Airtel share dropped 6.38 percent, quoting at Rs 347.55. Vodafone Idea shares traded at Rs 5.19 per share, down by 3.17 percent.
Disclaimer: The CNBCTV18.com editorial team does not engage in speculative or active trading in stock markets and follows its Code of Conduct on securities trading and investment. Any investor/ viewer is advised to carry out necessary diligence on their own or through a certified registered financial advisor for investment decisions.
Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary. 
next story