According to HSBC, the Indian mobile data services market is expected to be valued at $10 billion by 2022-23. The company says that while stability for the sector is a positive, the quantum of increase in operator revenues from higher tariff realisation coupled with resolution of issues regarding spectrum charges will determine future growth in the telecom sector.
HSBC asserts that following the cancellation of 122 2G licences by the Supreme Court in 2012, the telecom industry has been struggling to perform well. Even though the operators are in need of additional spectrum, the government?s previous efforts to auction spectrum have fallen short, owing to the high reserve price.
As per the global financial services company, in order to encourage growth in the sector, loss making operations have to be shut down. In addition, increase in profit orientation of new players will help improve price realisation of about 6 per cent over the next two years.
HSBC has assigned an over-weight rating to Bharti Airtel, neutral to Idea Cellular and underweight to RCOM.
