In a falling market, one of the sectors to have fallen the most is the telecom space. The BSE Telecom index has fallen around 17 percent on a year to date basis
Jefferies expects the sector’s profitability to remain under pressure for another 12 months. It expects improvement from Mid-FY20e, when share for top-three stabilises.
At this point, it said, consumer willingness to pay higher for similar service is low and valuations are factoring in best case now. Jio's ARPU discount is also at its target level, limiting price hikes.
Overall, it sees industry revenue to decline 5% over next 12 months, while mid term revenue CAGR of 15 percent may be seen.