Although, investors continue to be jittery, perceiving the anticipated launch by R-Jio as disruptive, Edelweiss said the RIL unit is unlikely to make profits till FY19. In addition, established players like Bharti Airtel and Idea Cellular are not constrained by resources and can counter any unrealistic offering by R-Jio 

The telecom sector in India is at a crossroads. It is facing tailwinds like waning competition, improved pricing power, data uptick and more accommodative policies on one hand and headwinds in the form of Reliance Jio's (R-Jio) entry on the other hand. "Though investors are jittery about R-Jio’s big bang launch, we firmly believe that sound operational performance will be the wind beneath stocks’ flight in the near term," says Edelweiss Securities Ltd in a research note.

Although, investors continue to be jittery, perceiving the anticipated launch by R-Jio as disruptive, Edelweiss said that in the near to medium term, the sector will be buoyed by tailwinds delivering better-than-expected realisations and higher volume surge (voice and data) which will counter headwinds from either the regulator or competitors.

Without doubt, R-Jio will be a scale player given the technology investments further bolstered by balance sheet might and robust execution record of its parent, Reliance Industries Ltd. "However, we believe, it will gain scale gradually post-launch (expected by August 2015). Even in a best case scenario, R-Jio is unlikely to make profits till FY19. Also, more established players like Bharti Airtel and Idea Cellular are in no way resource constrained and are fighting fit to counter any unrealistic offerings," the report added.

According to Edelweiss, limited competition and price discipline would ring in benefits for telecom companies over the next few years. Post 2012 auctions, the competitive landscape has narrowed dramatically with only about 5 operators per circle versus around 11 earlier. This proved a boon for the industry, enabling operators to regain their pricing mojo. Further, in order to help the sector stand on its feet the new government is likely to adopt a more accommodative stance.

"Moreover, we expect the industry to adopt a disciplined approach, unlike the earlier price hike regime wherein discounts and promotions had wreaked havoc. Thus, higher tariffs will boost cash flows and reduce net debt of companies. In case of Bharti and Idea we estimate cash flows of Rs64,700 crore and Rs16,700 crore, respectively, over FY15-20," the report added.

According to Edelweiss, limited competition and price discipline would ring in benefits for telecom companies over the next few years. Post 2012 auctions, the competitive landscape has narrowed dramatically with only about 5 operators per circle versus around 11 earlier. This proved a boon for the industry, enabling operators to regain their pricing mojo. Further, in order to help the sector stand on its feet the new government is likely to adopt a more accommodative stance.

"Moreover, we expect the industry to adopt a disciplined approach, unlike the earlier price hike regime wherein discounts and promotions had wreaked havoc. Thus, higher tariffs will boost cash flows and reduce net debt of companies. In case of Bharti and Idea we estimate cash flows of Rs64,700 crore and Rs16,700 crore, respectively, over FY15-20," the report added.