Indian telecoms to post loss in next 3 quarters: COAI

Indian telecom operators are likely to report losses in the next three more quarters due to tough competition and high levies, Cellular Operators Association of India (COAI) director general Rajan Mathews said.
India ARPU June 2018The PTI report did not mention about the possible revenue growth in the Indian telecom services sector in the coming quarters. Indian telecom operators posted 10 percent drop in Gross Revenue during the June quarter of 2018, according to TRAI.

Leading telecom operators in India include Vodafone Idea, Bharti Airtel, Reliance Jio, BSNL and MTNL. Aircel, Tata Teleservices, Reliance Communications, Telenor and Videocon have stopped their telecom services.

“Under the current scenario, I see at least another three-plus quarters of losses. I do not think the present tariffs are sustainable for long-term health of the industry,” Rajan Mathews said.

The high incidence of levies — licence fee and spectrum usage charges — compounded by upfront payment for radio waves have added to the operators’ woes.

“We have been through two quarters of losses during this fiscal. 2018-19 will be a tough year in terms of financial performance for the industry but the beginning of fiscal 2019-20 will see clarity emerging,” he said.

Continuous deterioration of revenue stream would be detrimental for the industry as networks will need investments in new technology and wider, better coverage.

Airtel India reported a loss of INR 940 crore during the June quarter of 2018-19. This was mainly due to competition from Reliance Jio.

Airtel, however, reported a net profit of INR 97 crore on a consolidated basis in the April-June period after taking into account revenues from its Africa business.

Idea Cellular posted net income of INR 263.5 crore during the June quarter — helped by one-time gain from sale of mobile towers.