Reliance JIO disrupting the Telecom sector! What is next for Idea, Bharti, RCom?

By Ashish Kyal -

Reliance JIO – much awaited AGM finally concluded revealing the tariff plan for its JIO customers.

It is indeed a revolution within the telecom space and it is going to redefine the way telecom industry exists as of now. Free voice call is going to drastically hit the profit margins of other telecom operators and they will have the redefine their business model. This will help India get digitally connected but at the cost shareholders profitability over medium term. In the long run I do not rule out the possibility of converting the Datagiri in profitability but for now it is a nervous sign for telecom sector as a whole and glorious step towards connecting India digitally!

Now let us look at the charts of a few telecom stocks – Bharti, Idea along with Reliance Industries (though it does not represent Jio separately)

Reliance Jio Chart

The above clearly shows that the telecom stocks have been in sideways action for many years now. The consolidation is going on since the top was formed in 2008. Reliance Industries has been one of a major dragger on index for many years even when Crude prices have been all over the places during this period.

Let us see if the disruptive method of entering into the much awaited telecom foray, results into a huge change the way industry functions or it simply fads away! These are surely interesting times and the shareholders might be anxious to see what happens by March 2017!


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