Sanity returns to telecom market, but miles to go for incumbents

The government’s bid to repair the telecom sector has brought much required reprieve for investors. Shares of Bharti Airtel Ltd and Reliance Industries Ltd, the parent of Reliance Jio Infocomm Ltd, have gained 37-47% so far in 2019.

After years of declining revenue, the industry is set to grow this fiscal year. As tariff hikes take full effect, analysts at JM Financial Institutional Securities Ltd expected revenue growth to accelerate to 25% in FY21. That is a remarkable change for an industry, wherein revenue was estimated to have fallen by about 11% in both FY19 and FY18.