A report on Tuesday said the country’s three largest private telecom operators will resort to another round of tariff hikes in the second half of the current fiscal year and will close out fiscal year 23 with 20-25 percent revenue growth.
The research wing of local rating agency Crisil said in a report that ARPU growth is essential for the industry to invest in network and spectrum, and if they don’t, it could lead to poor service offerings.
After years of fierce competition after entering the deep-pocketed company Reliance Jio, the industry started raising tariffs from December 2019.
“…revenues for the top three players are expected to grow 20 to 25 percent in this fiscal year,” the note said, adding that operating profit margin would expand 1.80 to 20 percent during the fiscal year.
It said that after a slow 5 percent growth in ARPU in fiscal year 22, the critical figure is set to grow by 15-20 percent in fiscal year 23 with the full impact of increases implemented in previous fiscal plays, and also Against the background of the most recent increases expected in the second half of the current fiscal year.
She said that as players are expected to spend increasingly on network and regulatory expenditures in fiscal year 23, ARPU growth and tariff increases could relieve some of the pressure on their books.
In the last financial year, there was a decrease in the total number of subscribers as Rs 3.70 crore was disposed of inactive users, the report said, adding that the number of active subscribers has increased during the year.
The top three telecom operators saw a 3 per cent increase in the number of active users by adding Rs 2.90 crore subscribers to the total, she said.
Reliance Jio saw its total subscriber base drop sharply between August 2021 and February 2022. However, the share of its active subscribers was 94 percent in March 2022, compared to 78 percent in the first quarter of the last fiscal year, Bharti Airtel reported. It added Rs 1.10 crore to active subscribers during the financial year raising its share of active users to 99 percent.
The rating agency said Vodafone Idea was a “mixed bag” during fiscal year 23 as the company lost 3 crores of active subscribers due to lower 4G capex and “service deterioration”.