RCom's 2G exit is a step in right direction but uncertainty lingers

While RCom has done the right thing by closing down its loss-making 2G business, investors should cut their losses in the stock as the outlook remains clouded

With Reliance Communications (RCom) announcing the closure of a major part of its wireless business within the next 30 days, its stock plummeted to near 52-week low of Rs 16.05. Given the company's weak fundamentals and high competitive intensity within the telecom business, existing investors would be better off exiting it, say experts.

Weak business fundamentals

RCom was one of the earliest entrants into the 2G business but remained a marginal player while competitive intensity kept increasing within the sector. Jio's entry created a massive disruption. Last year, at the time of its launch, it made calls free. RCom, which