While consumers may welcome the launch of Reliance Jio and prospects of free or cheap access to voice and data services, the same cannot be said about investors in the telecom sector.
In today's chart of the day, we take a look at the year-to-date performance, or rather underperformance, of the S&P BSE Telecom Index.
The 13-share telecom index is down over 18 percent, while the broader S&P BSE Sensex index is up around 9 percent, making it the worst performer of 2016. Also, the gap between the two indices is the widest on record.
It's interesting to note that Tata Communications is the only stock that has given a positive return in this period, while rest of the pack is down anywhere between 1 to 40 percent.
“Existing telecom players are facing a double whammy. They will have to lower their tariffs due to higher competition and they will require more investments to upgrade their technology. We do not recommend buying the stocks,” Daljeet Kohli, Head-Research, IndiaNivesh Securities told BloombergQuint in an phone interview.
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