Indian Telecom Players are Just Looking for Liquidity

Telcos apart from Reliance Jio have barely made free cashflows in the last few years. Bharti Airtel has recovered fast and posted great figures from the perspective of the investors, but there’s still a long way to go with 5G investments and there’s also the payment of deferred dues amounting to thousands of crores.

Highlights

  • The Indian telecom industry has been grinding to retain high paying customers and add new ones as fast as possible.
  • Telcos apart from Reliance Jio have barely made free cashflow in the last few years.
  • The telcos have been partnering with new players to offer things that aren’t directly related to telecom products/services. Along with this, the telcos are hiking tariffs.

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Indian Telecom Sector

The Indian telecom industry has been grinding to retain high-paying customers and add new ones as fast as possible. The game has slightly shifted from capturing the largest subscriber market share to the highest average revenue per user (ARPU) figure.

Telcos no longer just want subscribers at the cost of offering super affordable services. All the private telecom companies have hiked tariffs and are planning for more such hikes to improve the ARPU figure to boost overall revenues.

Being in the telecom industry as a private player means shelling out lakhs of crores for setting up infrastructure, getting spectrum from the government, paying RoW charges, getting multiple other clearances, and more.

One of the biggest pain points for the industry was/is the statutory dues. While the govt has decided to remove spectrum usage charges (SUC) and the need for bank guarantees (BGs) from the future spectrum auctions, both Vi and Airtel still need to pay thousands of crores in adjusted gross revenue (AGR) dues.

This limits the capacity of these private companies to invest in their networks and grow business. Further, it also impacts the kind of services the consumers get and the Digital India vision of the government.

Every Partnership, Tariff Hikes and More in Line with Boosting Cashflows

Telcos apart from Reliance Jio have barely made free cashflows in the last few years. Bharti Airtel has recovered fast and posted great figures from the perspective of the investors, but there’s still a long way to go with 5G investments, and there’s also the payment of deferred dues amounting to thousands of crores.

Thus, the telcos have been partnering with new players to offer things that aren’t directly related to telecom products/services. Along with this, the telcos are hiking tariffs. All of this is being done to run the business smoothly and grow it as fast as possible for the investors by generating more revenues.

The government has also helped the telcos with addressing their liquidity issues quite a lot, and now it all depends on the operators to fix their weak points to boost their revenues and profits.

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Tanay is someone with whom you can chill and talk about technology and life. A fitness enthusiast and cricketer, he loves to read and write.

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