Moneycontrol Bureau HSBC has reduced target price on Reliance Communication by 29 percent to Rs 49 a share as it feels The telecom company's share price has declined by 38 percent over last three months and HSBC feels that the fall is driven by slower progress on tower monetisation. It also adds that migrating CDMA subscribers to 4G may not be profitable for Reliance Communication. With the shutdown of 900 spectrum operations in 5 circles, total base stations for Reliance Communication came down by 12 percent. In addition Reliance Communication has entered into active infra sharing with 4G entrant Jio, which allows it to offer 4G services without investing much capex, says the broking firm.
"Rel Comm's active sharing limits the upside for the buyer of its towers assets as demand by anchor tenant for additional towers in the near to medium term may not be much. Both of these developments have a negative impact on tower valuations," HSBC says in a report.
At 11:43 hrs Reliance Communications was quoting at Rs 53.25, up Rs 1.10, or 2.11 percent on the BSE.
Posted by Nasrin SultanaFollow @NasrinszStoryReliance Jio is part of Reliance Industries which owns Network18 (publishes moneycontrol.com)
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