According to a report by S&P Global Ratings, increasing stability in the sector will boost earnings and strengthen credit metrics.
“We believe institutions will take the opportunity to focus on much-needed earnings and balance sheet improvement. Investors will likely be willing to commit substantial funds to the top three players,” the report said.
Vodafone Idea's recent equity raise has enhanced its viability.
“We believe the two largest institutions are improving profits and improving their balance sheets,” the report noted.
Telecom companies have increased the average revenue per user (ARPU) in the last three years.
According to industry experts, the latest round of 15-20 per cent mobile tariff hikes for prepaid and postpaid plans by telecom service providers (TSPs) could result in additional operating profits of around Rs 20,000 crore for the industry when these hikes are fully implemented. Will be absorbed by.
S&P Global Ratings expects ARPU to grow rapidly after slowing over the past 12-24 months.
However, the gains mainly reflect tariff hikes and increased demand for faster data.
“That said, in an industry defined by intense competition, sharp spectrum costs and unpredictable regulatory changes, an issuer's financial support will remain critical to its long-term viability,” it noted.
A stable three-player market is likely to increase revenues.
“We believe Bharti Airtel and Reliance Jio can now focus on improving returns. This would be a change from their previous approach of gaining market share,” the report said.
“We believe institutions will take the opportunity to focus on much-needed earnings and balance sheet improvement. Investors will likely be willing to commit substantial funds to the top three players,” the report said.
Vodafone Idea's recent equity raise has enhanced its viability.
“We believe the two largest institutions are improving profits and improving their balance sheets,” the report noted.
Telecom companies have increased the average revenue per user (ARPU) in the last three years.
According to industry experts, the latest round of 15-20 per cent mobile tariff hikes for prepaid and postpaid plans by telecom service providers (TSPs) could result in additional operating profits of around Rs 20,000 crore for the industry when these hikes are fully implemented. Will be absorbed by.
S&P Global Ratings expects ARPU to grow rapidly after slowing over the past 12-24 months.
However, the gains mainly reflect tariff hikes and increased demand for faster data.
“That said, in an industry defined by intense competition, sharp spectrum costs and unpredictable regulatory changes, an issuer's financial support will remain critical to its long-term viability,” it noted.
A stable three-player market is likely to increase revenues.
“We believe Bharti Airtel and Reliance Jio can now focus on improving returns. This would be a change from their previous approach of gaining market share,” the report said.
