Telecom Investment

Best Growth Stock – Telecom investment has been one of the hottest investments during the decade. Despite of the recuperation of economy from slowdown and the end of the phase of recession, telecom sector is the only area of IT sector which is showing decline time and again.

But over a period of 3 months, banking and insurance giants have come out with satisfying results. According to various analysts, after the phase of recession, almost all the commercial giant in IT sector have come out with huge profits but it does not hold good with the telecom companies. Almost a downfall of 3% has been observed in the profitability of such companies with the dawn of new financial year. Although the financial year started off with a positive note as far as market earnings are concerned but it is not giving expected result in the said sector.

The renowned telecom giants are also showing slowdown time and again in the stock market. The revenues of most of the major telecoms are declining over a period of last one month.

Various analysts in the IT sector have projected that the telecom companies are likely to move towards the developed economies with well evolved infrastructure. The major world economies like U.S. and Europe are making huge profits out of the sector considering the fact that infrastructure needed for such economies is already very advanced and thus offers economies of scale to such companies. Telecom giants like AT&T have their major business in these economies only.

It clearly states that new companies are willing to make expenditure of revenue and operational nature but not huge investments of capital nature. It is evident from the fact that the countries which have efficient and massive infrastructure for telecom services have come out with new innovative technological advancements like 3G spectrum.

The crave of US and European companies to make investment in developing economies like India is growing because the giant economies are facing jerks and are not observing unexpected profits and huge returns.

The telecom industry seemed to be stagnant to some analysts over a period of last few years but it catch up acceleration with the outbreak of 3G spectrum and other innovative ideas in the field of telecom. The expenditure by the telecom giants soared high owing to the upcoming of these new ideas and developments in the field of telecom.

The IT companies dealing, which have stake in telecom sector, have recorded to come out with inefficient performance as compared to those who have considerably lesser stake in such area. For example, Wipro , a renowned IT giant is performing weak as compared to other companies in the same area, the probable reason is that the company has a major stake in the telecom sector.

With the upcoming of 4G in the economies of US and most of the European countries, the telecom companies are intending to increase their capital expenditure further. The evolution of certain new rules has effected the functioning and interests of various web providing companies significantly. According to various analysts, the economies with sufficient infrastructure are likely to make more profits as compared to those economies which are lacking in the same.