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Mobile Subscribers Yearwise comparision

Indian telecom industry likely to remain financially subdued in upcoming quarters, says ICRA

October 31, 2017

According to the Investment Information and Credit Rating Agency of India (ICRA), the emerging oligopolistic industry structure after a year of severe competition is likely to be more promising withleaner structure, better pricing power, and steady data demand. However, in the short run, the operators are likely to compete intensely to garner market share. The financial position of the industry would remain subdued in the coming quarters, reflecting issues around pricing pressure, the decline in Interconnect Usage Charges and elevated debt levels.

Over the years the grossaverage revenue per SIM (ARPS) for the industry increased from Rs. 113 in 2014 to Rs. 128 in 2016 before declining sharply to Rs. 83 in 2017. The aggregate gross revenue (AGR) of the industry also mirrored this trend, which increased from Rs. 305 billion to Rs. 386 billion and then declining to Rs. 301 billion over the same periods.

Elevated debt level which has been an area of concern, affecting credit profile of the players, is expected to get streamlined, with improvement in industry ARPS. RJIL’s ARPS has increased from Rs. 96 for its first paid plan to Rs. 139 for the latest plan driving organic deleveraging over the longer term.

The operators who remain in fray are expected to be on more firm footing with revenue visibility improving on account of a healthy subscriber base, better pricing power, and the fact that data has become as integral a mobile service as voice – data usage per SIM per month has grown from 60 MB in 2014 to 1,248 MB in 2017. Data is likely to be the mainstay of the industry, and the industry would need to continue investing in content and new technologies to stay ahead of the curve. Technologies such as the Internet of Things (IoT) offer significant scale potential, and developing these is expected to keep the capex and spectrum requirements high.



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