Telecom stocks surge up to 6% after launch of 5G services; Airtel, Tejas Networks hit life high - know what Jefferies says

Shares of telecom companies gained up to 6 per cent on the BSE intraday during Monday’s trading session as the government Saturday launched 5G Services in the country. One of the major telecom service providers, Bharti Airtel touched a new lifetime high of Rs 813 per share on the BSE.

Prime Minister Narendra Modi on Saturday launched the 5G telephony services that promise to provide ultra-high-speed internet on mobile phones. The 5G services started with India’s number 2 operator Bharti Airtel rolling out services in eight cities, including Delhi, Mumbai, and Varanasi.

Individually, shares of telecom service providers – Bharti Airtel and Vodafone Idea – gained nearly 2 and 4.5 per cent to Rs 813 and 9.18 per share, respectively. Companies providing services related to the sector also advanced in today's session as HFCL, Indus Towers, Tejas Networks jumped between 2.5-6 per cent on the BSE intraday.

Tata Group-backed Tejas Networks also touched an all-time high of Rs 699.7 per share along with Airtel on the BSE intraday on Monday. Another Tata Group telecom firm Tata Teleservices (Maharashtra) Limited gained nearly 1.5 per cent to Rs 105 per share.

State-owned telecom company MTNL's share price was up over 1.5 per cent to Rs 22.05 per share on the BSE intraday.

Global brokerage firm Jefferies believes 5G smartphones will form over 50 per cent of the 500 million smartphone base by the end of calendar year 2023. However, to spur adoption, 5G services will have to be priced similarly to 4G services limiting meaningful Arpu (Average Revenue Per User) upside.