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Revenue of the Indian telecom sector to decline by 6 per cent during 2017-18, says ICRA

June 30, 2017

According to ratings agency, ICRA Limited, the revenue of the Indian telecom sector will decline by 6 per cent and reach around Rs 2.4 trillion during 2017-18. Further, as per the agency, the earnings before interest, taxes, depreciation and amortisation for the industry is expected to decline by 28 per cent and reach Rs 0.46 trillion during the same period.

According to ICRA, growing competition after the launch of services by Reliance Jio Infocomm Limited has impacted the revenue generation capacity and profitability of all players in the industry. To this end, the agency expects operators such as Tata Teleservices Limited, Aircel and Reliance Communications to witness a sharper decline in revenue during 2017-18. Moreover, the telecom industry’s debt is likely to increase from Rs 4.6 trillion during the quarter ended March 2017 to Rs 4.8 trillion during the quarter ended March 2018, the agency said. Further, the pressure on cash flows on the one hand and the need for constant capex on the other would pose a challenge for debt servicing of operators.

In addition, the agency expects telecom services to get marginally costlier for the entire subscriber base under the new goods and services tax regime.

 
 

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