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A lot of concerns are now flagged by a couple of brokerages on whether or not the 5G rollout is going to be more pain or gain for the telecom companies. What is your view?
I think the big issue with telecom always has been that there is a need of continuous capital expenditure and that does not go away but given that it is becoming more of a duopoly now with Vodafone (Vi) losing customers by leaps and bounds, the slack has been taken away by Airtel and Reliance.
The probability that the story will do decently well over the long run is high. Bharti has been stuck around at a certain level for a long time and it did not correct in the market correction also. I do not know who takes these brokerage downgrades seriously but it could be because of general profit taking.
If the stocks come down further, I would be more of a buyer than looking to get out of them.
Yes. It always happens in the utility industry that the equipment suppliers or the people who set up the networks, provide software, etc, tend to do better because they are not taking the risk of the entire business which is heavily capital intensive. So what you are saying is right and that could happen.
Have you bought any telecom ancillary or 5G equipment stocks?
No, not yet.
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