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Homechevron_rightBusinesschevron_rightIndia's top telecom...

India's top telecom companies to hike tariffs for revenue growth

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Indias top telecom companies to hike tariffs for revenue growth
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New Delhi: According to a report on Tuesday, Airtel, Jio, Vodafone Idea, the country's three largest private telecom operators will move on to another round of tariff hikes and end FY23 with 20-25 per cent revenue growth, in the second half of the current financial year.

The research arm of the domestic rating agency Crisil, said in a report that the industry needs to increase the average revenue per user to invest in networks and spectrum, otherwise it could lead to poor service offers.

The industry had begun raising tariffs since December 2019, after years of fierce competition following the entry of Reliance Jio.

"...revenue of the top three players is expected to grow a robust 20-25 percent this fiscal," the note said adding that the operating profit is expected to grow by 1.80-2.20 per cent in the current financial year.

After the ARPU (average revenue per user) growth of 5% in FY22, the critical figure will grow to 15-20% in fiscal year 23 when the full impact of the increases made in the previous fiscal year comes out.

The report also said that ARPU growth and tariff increases will reduce the pressure on their books as players expect increased spending on the network and regulatory caps in the 2023 fiscal year.

During the last financial year, the total number of subscribers declined due to the elimination of 3.70 crore inactive users, and the number of active subscribers increased this year, the report said.

The three leading telecom companies added 2.90 crore subscribers, a 3 per cent increase in the number of active users according to NDTV.

Reliance Jio's total subscriber base fell sharply from August 2021 to February 2022. However, its active subscriber base grew to 94 per cent in March 2022, compared to 78 per cent in the first quarter of last fiscal, Bharti Airtel said. During the financial year, 1.10 crore active subscribers were added and the share of active users increased to 99%.

The rating agency added that for Vodafone Idea, it was a "mixed bag" for fiscal year 23, as the company lost 3 crore active subscribers due to low capex in 4G and "deterioration of services".

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