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Telecom sector outlook constructive on rising demand, says Bharti Infratel

Telecom infrastructure company Bharti Infratel has said its outlook on the sector “remains constructive” due to rising demand and improvement in tariffs.

In its latest annual report 2019-20, company Chairman Akhil Gupta said the introduction of 5G and other new technologies in coming years and need for better connected nation in a post-COVID era will “intensify” the role of passive infrastructure players like Bharti Infratel.

Gupta said that 2019-20 proved to be a challenging year for the global economy with the emergence of COVID-19 towards the end of the year.

Noting major legal and regulatory developments in FY20, including the statutory dues case in the Supreme Court, Gupta said as a fallout of the AGR matter, all the operators hiked tariffs, which was a welcome first step towards sustained financial health of the sector after years of intense price competition that has led to significant revenue erosion.

Telecom Regulatory Authority of India (TRAI) has also issued a consultation paper to invite comments from stakeholders on various issues relating to tariff, including introduction of floor prices, to ensure long-term financial health of the sector.

“…our outlook on the sector remains constructive in the light of rising demand and improvement in tariffs. With the expected introduction of newer technologies like 5G in the coming years and the need for a better connected nation in a post-COVID world, we can only expect the role of passive infrastructure players like us to intensify,” Gupta said.

In a separate note, DS Rawat Managing Director and Chief Executive Officer of the company said post the imminent merger of Infratel and Indus (the scheme deadline for which has been extended to August 31), the combined entity will have a unified, nationwide presence along with very strong financial muscle to invest and capitalise on upcoming opportunities.

“We remain confident of the long-term potential of Indian telecom industry. The ongoing digital revolution, the next-generation technologies such as 5G, Smart cities, IoT (Internet of Things), and the need for a better network in a post COVID-19 world will open up new avenues for telecom infrastructure,” Rawat said.

The government had notified telecom services as an essential services which, along with its supply chain, continued to operate during the lockdown, he said, adding accordingly vital telecom connectivity had been maintained 24×7 for all the service providers.

“… we feel the telecom industry, in general, has been one of the least negatively impacted industries due to COVID-19 so far and there is no significant financial impact of COVID-19 pandemic on the company as well,” Rawat said.

In a section on risk management, the company listed out various risks – external and internal – including environment risk, regulatory risk, infrastructure risk, industry risk, client concentration risk among others alongside corresponding risk mitigation plan, and outcomes achieved during the fiscal 2020.

For complete annual report, click, Infratel AR FY20


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