The telecom services industry is expected to report moderate revenue growth of 7-9% year-on-year in 2023-24 due to muted average revenue per user (ARPU) expansion in the absence of tariff hikes, ratings agency ICRA said on Wednesday.
The capex levels of telecom firms will remain high as they expand 5G coverage and this will keep the debt levels of the industry elevated at ₹6.1-6.2 lakh crore as of March 2024.
As per ICRA, 5G roll-out entails densification of network and sizeable deployment of fibre, which is likely to increase the capex intensity in the near to medium term.
“The 5G services launched by the telcos have not been monetised and there are no 5G specific plans, which could otherwise have boosted ARPU levels. These factors, combined with the absence of tariff hikes, are likely to result in a moderation in ARPU growth,” said Ankit Jain, sector head, corporate ratings, ICRA.
The ratings agency expects industry ARPU to improve to ₹182-185 during this fiscal from ₹175 in 2022-23.
Jain said the industry is expected to report a year-on-year revenue growth of 7-9% for 2023-24, translating into OPBDITA expansion of 9-11% compared to that in the previous fiscal. “Industry consolidated revenues are expected at around ₹2.9-3.0 lakh crore with OPBDITA of around ₹1.5-1.6 lakh crore for FY2024.