Bharti Airtel to Tejas Networks: Here's How India's Most Popular 5G Stocks are Performing

Recently, our school batch had this big reunion via a zoom meeting.

There were so many people on the call. I was seeing almost all of them after 8 years so I had no idea how to react or directly talk to them. Being a socially awkward person, most of the time I only kept smiling while everyone else went on and on.

The problem emerged when they asked me to speak, at least something. That's when I decided it was the right time to use the age-old excuse "Sorry guys can't hear you". I took pauses in between to make it seem like my voice was cracking. They believed it and I quietly dropped from the call.

Best friends know you quite well, don't they?

After I dropped the call, my best friend texted me, 5G will be launched soon".

So I guess 'bad network' will no longer be an excuse as India gears up to be a 5G-enabled country.

5G spectrum auctions concluded on 1 August 2022 and on 1 October 2022, prime minister Narendra Modi officially launched 5G services at the India Mobile Congress (IMC).

Indian Mobile Congress 2022

Modi launched 5G services in the sixth edition of the IMC 2022.

He talked about how the launch of 5G services will benefit people all around India. Beginning from education to healthcare sectors, the launch of 5G sectors will make common people's lives better.

Modi went on to say 5G services will first be launched in 13 cities. These 13 cities include Ahmedabad, Bengaluru, Chandigarh, Chennai, Delhi, Gandhinagar, Gurugram, Hyderabad, Jamnagar, Kolkata, Lucknow, Mumbai, and Pune.

Ashwini Vaishnav, the minister of communications and electronics, said the government will set up 100 5G technology labs across India. He urged the telecom industry to convert at least 12 of them for education and training of students.

Reliance Jio and Bharti Airtel laid out their 5G implementation plans. Both the telecom giants said they will do a phased implementation of 5G services.

Airtel rolled out 5G services in 8 cities on 1 October itself. It will cover all urban areas by December 2023 and will cover the whole of India by December 2024.

Jio said that it will roll out the most affordable 5G services across India by December 2023.

Looks like Vodafone Idea is yet to cut out the roadmap for the 5G race. The chairman of Aditya Birla group said they will roll out 5G services soon but no timeline was specified.

It looks like India has stepped on the accelerator to implement 5G. India may have been late in bringing in 5G but it is not wasting a single breath to implement the same.

Lucrative Indian 5G market

The sheer size of Indian market is lucrative for any business but 5G holds out a special opportunity because India has a special position. India is the third largest market to deploy 5G infrastructure after US and China.

China and US have tensions regarding 5G development. The US was urging countries over the world to not enter into a contract with Chinese companies to develop their 5G infrastructure because they had spyware.

As a response to this, China stuck exclusively to its home companies - Huawei and Zte. China has the largest market size but companies around the world could not benefit from the same.

India is one of those countries that has not allowed Chinese telecom infrastructure developers to compete for 5G contracts. Thus for non-Chinese companies, there is a big opportunity for developing the market in India.

Ericsson, Samsung, and Nokia are the three big companies that have their eyes set on the Indian 5G markets. Airtel and Jio already have a contract with Ericsson to tap into this opportunity.

Nunzio Mirtillo, senior vice-president and head of the market area Southeast Asia, Oceania & India, Ericsson, said,

• "We have prepared ourselves to manage the volumes that are required for India. In India, through our contract manufacturing partner Jabil, we have manufacturing capability, which we will scale up in order to cope with the demand."

Customers are actively looking to upgrade to 5G. People are willing to switch their service providers if they can get faster access to 5G.

Hence there is a huge demand for 5G services in India. People are looking forward to 5G like they look forward to good food at a wedding.

Now, let's take a look at how the popular 5G stocks in India have fared after 5G spectrum auctions.

How have Indian 5G stocks performed on bourses?

Sometimes, good news does not mean good numbers. This is true for Indian 5G companies.

Only two companies, Bharti Airtel and Tejas Networks are running in the positive, if YTD returns are considered.

Other companies are facing the heat of global deflationary pressure, and the influence of other business segments on the 5G arena. Hence, their performance on the bourses has been disappointing despite the growth opportunity.

5G stocks performed so far in 2022

Companies	Closing on 03-Jan-2022	Closing on 30-Sep-2022	Performance so far
Tejas Networks	426.9	673.2	58%
Bharti Airtel	691.2	799.8	16%
Reliance Industries	2,404.35	2,377.7	-1%
HFCL	80.8	72.8	-10%
Indus Towers	248.9	197.4	-21%
Vodafone Idea	15.1	8.8	-42%
Sterlite Technologies	284.55	164.5	-42%
Tech Mahindra	1,785.1	1,008.2	-44%

Data Source: BSE

Investment Takeaway

Companies are gearing up for the massive change that will come. If 5G implementation is done at the speed intended, India will truly experience a new digital universe.

5G sector change is not just a standalone change, it will bring a change in the entire Indian economy. 5G services will play a major role in making India a US$ 5 tn economy by 2024-25. Economists say 5G services will cumulatively create an impact of US$ 1 tn by 2035.

Hence an enormous opportunity lies for companies to make money from 5G. But deploying new technology in the market is no joke, there are a lot of challenges that these companies will face.

Hence, investors should carefully weigh the pros and cons of the 5G industry and then invest accordingly.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...