The average revenue per user (ARPU) continued to decline for telecom players during the past one year, mainly on account of intense competition. Despite this, operators were compelled to deploy huge capex in a bid to stay ahead in the telecom race. Lower revenues, coupled with high capex costs, added considerably to the financial burden of the already debt-laden sector.
This was reflected in the financial performance of most of the telecom companies. The impact, however, was more pronounced for operators, as they faced stiff competition and tried to cope with consolidation. Idea Cellular, which had accrued profits in 2015-16, registered a loss in 2016-17. Meanwhile, companies such as Reliance Communications, Tata Teleservices (Maharashtra) and Mahanagar Telephone Nigam Limited (MTNL) saw a widening of their losses. And companies such as Bharti Airtel, Himachal Futuristic Communications Limited, Aksh Optifibre and Birla Cables Limited witnessed a decline in profits.
Meanwhile, the profits of Sterlite Technologies, ITI Limited and Finolex Cables increased in 2016-17 against 2015-16. Also, GTL Limited, GTL Infrastructure, and Aishwarya Technologies and Telecom Limited managed to bring down their losses in 2016-17.
On a quarterly basis, the performance of most telecom operators remained sluggish, indicating that there is still time before stability returns to the sector. As for vendors, optical fibre cable manufacturers continued to have a good run, buoyed by high fibre demand from the industry.
A look at the financial performance of select telecom companies…
