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Friday, February 11, 2011

Telecom stocks - Any takers?

With latest recommendation from TRAI to recover the spectrum cost from all telecom operators in India is the latest news related to spectrum scam in which politicians and telecom companies have shamelessly looted taxpayer's money. Is this going to affect telecom stocks?

"A. Rajane 3000 crores khaaye", it's an old news! Pata nahi sala yeh log kaise itana paisa khaa jaate hai. Mai ek rupaye ka coin bhi khaaun to muze to doctor ke paas jana padegaa operation ke liye!! Yeh RAJA ko 3000 crore rupayese subah problem nahi hogi??? Kaunsaa kayamchurna khata hogaa kameena? ;)

Anyways. TRAI has recommended to increase the 2G spectrum prices for all 2G operators in India which have licenses.

All companies collectively will need to pay RS.24,700 crores! These are rough calculations but following are the numbers which telecom companies will have to shell out as a price for their corrupt business strategies.

BSNL: Rs.7563 crores (not listed in stock marekt)
Bharti Airtel: Rs.4284 crores
Idea cellular: Rs.1985 crores (idea of corruption is bad sirjee!!, shame on you)
Vodafone: Rs. 1763 crores
MTNL: Rs. 1150 crores
Aircel: Rs. 489 crores
Loop telecom: Rs. 191 crores
R-Com: Rs. 78.7 crores

Newly launched companies like Videcon, loop, uninor, Tata teleservices (old CDMA player, got GSM 2G license recently, R-COM (same as Tata) will be bearing a brunt in this. Collectively these companies will have to shell our Rs. 7000 crores. It is just an IDEA and not the exact figure.

Bravo! Big companies, big fines! Every company listed here is going to pay price from their kitty of profits, reserves, investments. Book value and profits of each of these companies are going to be eroded and so the value of shares. Being a shareholder, each one will be paying price in terms of book value and profit share.

Stocks of these companies will loose it's sheen and stock value at least in medium term. Do not buy stocks of any telecom company at least for next few weeks till the picture gets clear.

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