India 5G telecoms need to invest Rs 3 lakh crore more: ICRA

5G deployment across India will require densification of the network and thereby sizeable investments in fiberisation, according to rating agency ICRA.
C-band 5G base stationsIndia has around 35 percent of its towers fiberised and the Capex to fiberise the adequate number of towers to provide a sturdy network base would be close to Rs 3 lakh crore over the next 4-5 years.

5G deployment will entail densification of network and close placement of radio antennas, with possible collocation on street furniture. While small cells are likely to be the first option to start with, these need to be connected with fibre for efficient network coverage and delivery,” Ankit Jain, Vice President and Sector Head, Corporate Ratings, ICRA, said.

Indian mobile operators’ ARPU has crossed Rs 170 (USD$2 plus) mark in H1 and is likely to touch Rs 180 by the end of the fiscal.

Debt levels of Indian mobile service providers remain high. The industry is expected to close the year with a debt of around Rs 6.3 lakh crore as on March 31, 2023.

Telecom operators implemented tariff hikes in Q3FY2022, which coupled with consistent upgradation of subscribers to 4G from 2G and increase in usage of telephony services have resulted in improvement in industry ARPU to more than Rs 170 for H1 FY2023. ARPU is expected to cross Rs 180 by the end of this fiscal and close to Rs 200 by FY2024.

The industry is expected to report a growth of 13-15 percent in its operating income in FY2023, which will translate into OPBDITA expansion by 18- 20 percent. Industry consolidated revenues are expected to be around Rs 2.6-2.7 lakh crore with OPBDITA of around Rs 1.3-1.4 lakh crore for FY2023.