5G Backhaul Fiberisation to Cost Rs 3 Lakh Crore for Telcos: ICRA

Indian telcos are rolling out 5G Networks at a faster pace. Whether 5G in the near term has any use case for end consumers apart from performing speed tests or not is a different case, but for a meaningful 5G rollout, there needs to be a lot of digital infrastructure deployment. ICRA, in its report, says that for a full-scale 5G deployment across the country, network densification is required, and the industry needs to invest in fiberisation.

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Current level of Fiberisation

India currently has around 35% of its towers fiberised, and ICRA expects that the CAPEX required to fiberise the number of towers needed to provide a full-scale 5G Network experience would be close to Rs 3 lakh crore over the next 4-5 years.

ARPU Metrics

The rating agency further said that the Telecom Industry has continued to report improvement in operating metrics as reflected in ARPU levels. ARPU has already crossed Rs 170 mark in H1 and is likely to touch Rs 180 by the end of the fiscal.

This comes at a time when telcos are trying to increase their ARPU by raising tariffs. Bharti Airtel took an Industry initiative to hike entry-level tariffs in nine circles, and such a move is still awaited from the struggling telco Vodafone Idea.

Also Read: Airtel Hiking Base Tariffs to Rs 155 in 9 Circles is a Positive Move for Industry

Debt Levels Remain High

However, despite the positive ARPU metrics, the rating agency said that the debt levels remain high and further increased after the conclusion of the last round of spectrum auctions. As a result, the industry is expected to close the year with a debt of around Rs. 6.3 lakh crore as on March 31, 2023.