Telecom is a long-term growth story: Lancelot D'cunha

What's your call on telecom space, given all the news flow?

Lancelot D'cunha: The telecom space is in a phase of consolidation and we saw earnings of Reliance Communications coming down with ARPUs coming down and Bharti did come out with reasonably good numbers but you saw some stress in the numbers in terms of revenues getting hit a bit, especially margins were looking weak, so I see that with the kind of pricing that they have paid on the 3G, it is going to take a longer time for them to actually breakeven and penetrate the market before you actually see the 3G revenues adding to the bottom line of the telecom players.

For Bharti especially, the African venture might add some earnings to their bottom line and that could be a strategic investment, which will play out over the next few years but otherwise from valuation perspective, almost all the telecom companies are fairly valued and one has to invest in these companies at dips because the long-term growth story on the telecom side will continue, though it may take a pause during this period of consolidation before you see data and 3G services actually becoming a kicker to large earnings growth, so I would wait for dips and then look at taking some exposure to the telecom sector.