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Telecom ARPUs need to grow much more to break even: COAI DG
The recent growth in average revenue per user (ARPU) is not adequate and it needs to grow much more with a higher growth rate for the telecom operators to break even and support the financially stressed telecom sector, said the Director General of the Cellular Operators Association of India (COAI), S.P. Kochhar.
Speaking to IANS, Kochhar noted the recent rise in revenue per user has been on the back of high utilisation of telecom services amid the pandemic and the lockdowns.
He said that if the ARPU growth continues at the current pace then it would take several years to reach a “minimum acceptable level”.
“ARPUs have gone up, but they have gone up marginally. This marginal growth is not sufficient to bring them at a break-even level and if they grow the way they are rising, it will take many many years before they can come to a minimum acceptable level,” Kochhar said.
He reiterated the long standing demand of the telcos for rationalisation of spectrum charges and licence fee need.
Citing the past few spectrum auctions wherein there were not many takers for the spectrum put on the block, he said that national assets such as spectrum are there for the benefit of the citizens. “Spectrum charges, licence fee needs to be reduced. What are we going to do with the spectrum if there are no takers.”
Talking about the financial health of the sector, he said that the conditions are “bad” and if the operators have to bring new technology, including 5G and provide good experience with affordable cost to the citizens, the financial condition will have to improve.
“Without improving the financial health, it will be very difficult for the telcos to really invest so heavily into technologies,” the COAI DG told IANS.
He also stressed that the government will have to view telecom as an essential service, given the role it has played amid the pandemic and the lockdowns.
In terms of levies too, the government should not look at just the revenue which the operators earn but also acknowledge the growth it provides to the operations and earnings to other sectors through its services.
“Post march it has been proven without doubt that telecom is no longer any other vertical sector. It is a foundational sector. And on this foundation will grow other sectors. You name any sector in the economy and that sector will draw a lot of strength from the telecom sector,” he said.
“The citizenry of the country was lucky that we had a sound telecom sector. If it was not for telecom the country would have come to a grinding halt during Covid. The operators lived up to its promises that we will provide services to our citizens come what may.” IANS
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