The Indian telecom industry is going to witness very moderate revenue growth in FY24. According to ICRA, revenue growth of about 7-9% is likely to come in FY24 over FY23. The moderate growth is due to the absence of any major tariff hike and no monetisation of 5G. Further, the telcos are going to keep their capex elevated as they are aggressively rolling out 5G. Because of elevated capex, ICRA believes that the industry's debt levels will also remain high, with around Rs 6.1-Rs 6.2 lakh crore on March 2024.
While the telcos have not engaged heavily in tariff hikes, they have made certain moves to ensure that they can earn more out of low-paying customers. Bharti Airtel, for example, removed its much beloved Rs 99 prepaid data back that used to give validity with talk time and data to customers. Airtel made Rs 155 plan the lowest recharge plan through which customers can get validity. Vodafone Idea is also doing the same in several circles now. Reliance Jio is yet to engage in such a move.
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However, when it comes to revenues and the average revenue per user (ARPU) growth, Airtel is likely going to lead in the industry. For the unaware, Airtel recently brought a Rs 99 plan, but this is not the same plan that was removed earlier. It is also a prepaid pack, but it is not meant for validity. It is a data voucher that comes with 30GB of data but has a validity of just 1 day. This plan can be recharged on top of the existing base prepaid plan that you have subscribed to.
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ICRA also pointed out that the telcos are not monetising their 5G. If they did, they could have pushed their ARPU upwards. To roll out 5G, fiberisation is required, for which the telcos will keep the capex elevated.
