Telcos weighed down due to ongoing spectrum auctions: Deven Choksey

In an interview with ET Now, Deven Choksey, MD, KR Choksey Securities shares his views on telecom space. Excerpts:

ET Now: What is the sense that you are getting about the telecom basket because we completely saw it getting clobbered down in trade yesterday, more pain and a complete avoid at that?

Deven Choksey: We have been maintaining on this particular front the avoid kind of a recommendation for most of the telecos and I was making a point even up till now in the many of the telecos for bidding aggressively for the spectrum auction which is going on right now. They are likely to see the delay in the payback period that they are investing money for and that is not going to be healthy for these companies.

The silver lining out here could be that consolidation would help them bring the pricing power back and to an extent ARPU would come back to a level at which they may be feeling little bit more happy so there could be a silver lining but we want that there is nothing much. Most of the telecos are quoting at adequately high level of valuation so to a greater extent I would think that one would probably stay away from the voice telephony segment of the business and probably look around elsewhere for making money in the market.