There will be some consolidation in the tower infrastructure space, says Rumit Dugar, director-India TMT Research, Religare Capital Markets. Also, a lot of broader telecom players have high leverage and to that effect asset sales can obviously reduce debt, he says.
Telcos will also have to invest in data spectrum and data networks, thus wanting capital release from asset sales, he says. According to him, at the margin it will reduce stress on the balancesheets of the companies.
Dugar also spoke about the IT sector.
Below is the verbatim transcript of Rumit Dugar's interview with Ekta Batra & Sonia Shenoy on CNBC-TV18.
Ekta: What about Reliance Communications. It is possibly going to sell its entire stake in Reliance Infratel. If it does then would your analysis maybe on specific telecom companies and your analysis of the deal if it happens?
A: We do not cover Reliance Communications. However, from industry perspective you are seeing some consolidation on the tower infrastructure space and lot of broader telecom players have high leverage. So thus asset sales which can reduce debt on the balance sheets will be positive for those specific companies and most of the players have to invest in data spectrum and data networks and thus they would want to release some capital from selling these assets. Therefore, at the margin it will reduce the stress on the balance sheet.
For entire interview, watch accompanying video.
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