Indian telecom service providers are forecast to report revenue growth of 6 percent in fiscal 2019-20.
Revenue of telecom service providers are expected to drop 7 percent in fiscal 2018-19 against 11 percent drop in fiscal 2017-18 to Rs 2.1 lakh crore.
The expected dip of 7 percent in the current fiscal of 2018-19 will be the third revenue drop faced by telecoms in the last three years, domestic rating agency Icra Ratings said.
The competition after the launch of Jio has continued and the pricing pressure has manifested in severe deterioration in the financial performance, marked by a decline in revenues, lower profitability or losses for some telcos and low cash generation.
Operating profit decline is expected to narrow to 18 percent in fiscal 2018-19 from 21 percent decline in the previous fiscal. Operating profit will grow by 20 percent in fiscal 2019-20.
Telecom operators will gain from the benefits of higher data usage, and a relatively more consolidated and stable industry structure resulting in some pricing discipline during financial year 2019-20.
Mobile operators will be bolstered by planned deleveraging initiatives to the tune of Rs 90,000 crore – Rs 1 lakh crore.
Overall debt for the sector will come down to Rs 4.3 lakh crore in end-FY20, from Rs 4.75 lakh crore expected in March 2019.
Mobile operators have controlled the decline in ARPU and incumbent operators are looking for triggers of upward movement, with some operators implementing minimum recharge plans.