Tariff Hike Might Help Telecom Operators To Increase ARPU In FY22


The up-gradation of 2G and 3G subscribers to 4G services will show some improvements in the ARPU in the next two or three quarters. Besides, the telecom operators are likely to raise tariffs further to increase the revenue from the next financial year as per the investment information firm ICRA report.

Tariff Hike Might Help Telecom Operators To Increase ARPU In FY22

Besides, the ICRA suggested that telecom operators might achieve Rs. 220 average revenue per user in the coming months and help the industry increase revenue by 11 to 13 percent in the next two years.

Cash Flow Of Telecom Industry Might Improve: Details

The firm also believes that the cash flow of the industry is likely to get better in the next financial year (2021- 2022). It added that the industry might reduce the borrowings from the outside as the whole situation will improve and operators will invest in operations on their own. However, the firm added that the upcoming spectrum auction and adjusted gross revenue (AGR) liabilities might affect the sector.

ICRA also noted that the debt on the industry might remain close to Rs. 4.7 lakh crore by March 31, 2022. However, it is expected that improvement in the operating metrics will cover some of the debt. "The sector is moving towards the inflection point where the next phase of growth will be driven by the non-telco businesses, which include enterprise business, cloud services, digital services, and fixed broadband services," ICRA added further.

5G Network Will Change The Whole Telecom Industry: Details

Furthermore, ICRA said that 5G (3300- 3600 MHz band) can play important role in the growth of the sector; however, the high spectrum prices might affect the overall auction. It said that the Pan-India rollout of the 5G network might take time as the whole procedure requires a lot of investment and the balance sheet of operators shows a huge debt.

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