Airtel, Vi Should be Happy With Rs 170 ARPU Prediction from ICRA

Airtel Vi

Bharti Airtel and Vodafone Idea have been very vocal about the need for the telecom industry average revenue per user (ARPU) figure to improve. ICRA, an independent credit rating agency, has predicted that telecom sector ARPU will reach Rs 170 levels by the end of FY23. It will improve the overall profit generation for the telcos. This, coupled with the relief measures that the Government of India (GoI) has announced for the telecom sector, would create enough headroom for the industry to reduce debt as well as invest more freely in technology and equipment upgrades for 5G.

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Telecom Industry Revenues Expected to Grow by 18% to 20% in FY23

Sabyasachi Majumdar, Senior Vice President and Group Head, Corporate Ratings, ICRA Limited, said the latest tariff hikes would help the telcos in increasing ARPU levels. Further, the constant upgradation of 2G subscribers to 4G would add to the ARPU of the telecom operators in the coming years, added Majumdar.

Majumdar also said that the telecom industry revenues are expected to grow by 10% to 20% in FY23, followed by a growth of 10% to 12% in FY24.

According to ICRA calculations, the moratorium on statutory payments provided to the telecom operators would provide an annual breather of about Rs 40,000 crore to the industry by 2025. On top of this, the bank guarantees (BGs) have been slashed significantly, and the Department of Telecommunications (DoT) even returned thousands of crores worth of BGs to the telcos recently.