IDEA and writing a story on it

I never thought of this sector as a trading bet in earlier times. After the MTN deal was called off and because of low PE at the then circumstances I was just thinking to buy a few shares of BHARTIARTL. But the rate war put the water on the fire and there is nothing but dead cat to bounce now and then. It is sad to write off completely about this sector which stills enough opportunity to grow volumetrically in India. Total telephone subscriber per 100inhabitants is 32.57 compared to that of 134.92 in USA (reference http://www.itu.int/ITU-D/icteye/Reporting/ShowReportFrame.aspx?ReportName=/WTI/BasicIndicatorsPublic&RP_intYear=2008&RP_intLanguageID=1) whereas in USA it is 134 and still far less than most of developed and developing countries. There are chances of volume growth with severe knock in profitability. Probably the sector will run in very low PE range in the coming quarters. It may so happen there will be an optimum effort from the biggies to sustain by consolidation or acquisition with smaller player. I do not want to believe the concept that small player may do well in this circumstances than the biggies. Rather they will more susceptible to be acquired by the biggies in future gradually of course.

Once the consolidation are over there will be chances of growth because Telecom gradually cover our digital life. That stage is yet to grow in rural India. With reduced cost and with greater chances of getting easy entertainment the digital growth will move faster speed compared to the growth in last decades. I expect companies like BSNL especially those run by Government of India will turn to be sick Industries. On the other hand the big private sectors will try to grow bigger desperately for their own survival. Obviously these are the things may happen in years to come. But the acquisition of smaller companies like IDEA etc may occur little rapidly. So purely on relatively longer period of time there are chances BHARTIARTL will be a better bet but stock like IDEA may go up in relatively shorter term. Undoubtedly these are neither any investment call nor any trading call. But if someone wish to take exceptionally high risk (which I feel most small retail investor use to take in market effectively but unfortunately) they may accumulate the stock gradually with every fall of 10% instead of trading the same for 1 or 2% gain. And those who think Bharti as an investment let them wait another year for the stock to run at less than 10PE.