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Telecom industry revenue expected to rise 14-15%

Telecom industry’s revenues are expected to rise 14-15 per cent in the current financial year led by some uptick in average revenue per user, though the subscriber base may remain flat with rural growth offsetting SIM consolidation in urban locations, apex association COAI estimates.

The newly appointed Director General of Cellular Operators” Association of India (COAI)’ S P Kochhar told PTI that any duopoly situation in the current three-player private telcos market can “never be a good thing” and asserted that sufficient competition among the operators is required for ensuring that subscribers get good services at better prices.

The COAI will continue to be a neutral body that believes in consensus building and unanimity of views, Kochhar said when asked about past differences amongst the telecom companies, who are members of the association, on various issues.

“COAI tries to get the point of view of all members unanimously and we make sure whenever we project to any authority whether in government or regulatory, we do it as unanimous voice, we are not partisan…,” he said.

Kochhar said that industry”s financial distress is “evident” and that the COAI will continue to push for relief including reduction in spectrum usage charges (SUC) and licence fee; and exemption of GST on licence fee and SUC, as well as on payment of spectrum acquired in auctions.

On whether, the telecom industry is headed towards a duopoly, Kochhar spoke in favour of competition saying, “at the end of the day, general public should get benefits of telecom and that will not happen in case of a duopoly”.

It is in the interest of the country that duopoly does not come in and “we have more competition, so better services at better prices can be offered to subscribers”, he said.

The industry’s revenue, Kochhar said, will grow at 14-15 per cent in FY21, led by some improvement in average revenue per user (ARPU).

“We also expect the subscriber base to remain flat in this fiscal, and the rural subscribers will grow to offset the SIM consolidation in urban geographies.

“Data consumption per user per month will move higher from 12 GB to 15 GB by next year, and there will be increase in ARPU this fiscal but whether that will be significant increase or not is something we will have to see,” he said.

However, Kochhar added that the association has not received any indication as yet from its members companies on tariff hike.

“Only recently ARPUs started moving up. But with various other liabilities on telcos, profits have not yet started seeing the light of day and companies are unlikely to be profitable with the current scale of improvement in ARPUs. ARPUs should go up by at least twice the figure than it is at, now,” he said. PTI

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