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Telecom industry’s revenue to grow 7 per cent in 2019-20, says CRISIL

April 17, 2019
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According to CRISIL, the telecom industry is looking at a 7 per cent growth in revenue in 2019-20 owing to an increase in average revenue per user (ARPU) by 11 per cent. ARPU levels will be boosted by higher data usage and introduction of minimum recharge plans. It believes tariffs have hit the bottom as reflected in stable pricing.


Further, profitability of operators may see an uptick with earnings before interest, taxes, depreciation and amortisation (EBITDA) margins improving by around 350 basis points year-on-year to 31 per cent in 2019-20. Combined EBITDA of the top three operators is expected to jump by over 20 per cent to Rs 562 billion from Rs 461 billion a year ago.

Although capex has been high in the sector, network capex for the top three telcos is expected to moderate to Rs 840-900 billion in 2019-20, as against Rs 1 trillion in 2018-19.

Improvement in profitability and decline in capex coupled with significant plans to deleverage will support debt reduction to Rs 3.1 trillion by March 2020. However, overall subscriber base is expected to reduce by 4 per cent and any price-led aggression could impact all operators adversely.

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