Telecom stocks are buzzing again. Should you invest?

After months in the wilderness, telecom stocks are back on the radar. The BSE Telecom index surged 27% over the past month even as the Sensex inched up by 1.57%. The decision by telecom operators to hike tariffs after years of bruising price wars, lifted sentiments towards these stocks. A temporary reprieve for Vodafone Idea and Bharti Airtel on spectrum dues also acted as boosters. Should investors connect with telecom stocks again?

Biting the bullet
After a long time, all three leading operators hiked tariffs for prepaid subscribers. Voda-Idea and Airtel hiked tariffs by 40% for minimum recharge plans. Prices of popular bundled plans have also been increased by 25-41%. With all telcos moving towards price parity and more rational tariffs, analysts expect operating health of these players to improve substantially. While