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Informist, Thursday, Nov. 14, 2024

MUMBAI – Shares of Indian telecommunication companies may decline further next week, with the fall in earnings growth and customer base expected to weigh on investor sentiment in the near term. A likely fall in the overall stock market may also have a ripple effect on telecom stocks. The Indian stock market continued to fall for the second consecutive month due to foreign outflows, rupee depreciation, rise in US Treasury yields, slowdown in domestic corporate earnings growth, and expensive valuations.

Falling customer base is also a negative. In August, Indian telecom operators net lost 5.77 million wireless telecom subscribers, compared with 922,375 mobile subscribers lost in July, according to data from the Telecom Regulatory Authority of India released in October. Reliance Industries' Reliance Jio Infocomm, Bharti Airtel, and Vodafone Idea lost customers, while their unlisted peer Bharat Sanchar Nigam added users.

A major talk of the town is the licencing application by Elon Musk's Starlink in India, updates on which will be closely watched by the market. According to reports, Starlink has agreed to meet the government's data localisation and security demands, marking a potential entry into the country's internet market. "Musk's involvement with US president-elect Donald Trump may also play a key role in boosting Starlink's entry into our market and increase the competition with domestic players like (Bharti) Airtel, (Reliance) Jio, and VI (Vodafone Idea)," an analyst tracking telecom companies said.

Further, news reports said the telecommunications ministry is planning to set up towers in an attempt to enhance connectivity and solve the issue of call drops. The ministry is planning to set up 27,000 towers and connect 26,000 villages across the country, India Today reported Wednesday. The report also said that the government is looking to impose financial disincentives on telecom companies for non-compliance of guidelines.

On the quarterly earnings front, Vodafone Idea Wednesday posted a consolidated net loss of INR 71.76 billion, higher than the loss of INR 67.11 billion the Street had expected. Revenue from operations grew 4% sequentially to INR 109.3 billion, lower than the market's estimate of INR 112.60 billion.

TOP HEADLINES

* Analyst Concall: Vodafone Idea hopes to stage smart turnaround in FY25

* Earnings Review: Vodafone Idea's loss widens on falling subscriber count
* 3M India Jul-Sept net profit falls 8.4% on year to INR 1.34 bln
* Earnings Outlook: Vodafone Idea to post loss yet again as subscribers dwindle
* HFCL consortium lowest bidder for BSNL project with bid worth INR 69.25 bln
* PRESS: Trump's tariffs on China could double India iPhone output to $30 bln
* ITI lowest bidder for INR 15.37 bln BSNL tender for some northeast states
* Dixon Technologies arm in pact with Nokia to make fixed broadband devices
* Promoter Bharti Telecom acquires 1.2% stake in Bharti Airtel via off-market

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anjana Therese Antony

Edited by Ashish Shirke

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