Fitch expects 10% hike in telecom revenues
Bharti's ratings headroom is likely to improve with an equity infusion, planned asset sales and growing EBITDA from Africa.
By ET Bureau | Updated:
NEW DELHI: The fourth-quarter results of Bharti Airtel, India’s No. 2 telco, indicate a broader rebound for the country’s mobile telephony sector, Fitch Ratings said, expecting an almost 10% increase in industry revenue this year – the first rise in three years.
The sector’s blended monthly average revenue per user (Arpu), a key metric of profitability, is expected to rise by 20% owing to increasing tariffs, the ratings company said in a statement Wednesday. Fitch attributed the expected improvement to easing competition and growing data traffic due to the proliferation of affordable 4G handsets.
“We expect industry revenue to rise by 5%-10% in 2019 - the first growth in three years -underpinned by easing competition and growing data traffic with the proliferation of affordable 4G handsets,” said Singapore-based Fitch director Nitin Soni. “We expect blended Arpu to rise 10-20% to $1.6-1.7 (Rs 111-118) per month in 2019, underpinned by incumbents’ introduction of a minimum mobile tariff of Rs 35 per month and growing data use.”
Industry experts are hopeful of a turnaround, with some expecting a more stable market than before.“I don’t see a great uptick in churn and I don’t see hyper-competitive pricing going on... because of those factors, I would expect to see stability return to the market,” said Cellular Operators Association of India Director General Rajan S Mathews.
Indicating improvement in finances of all telcos, Fitch said the top three were likely to focus on profitability, with revenue market share stabilising at 30-33% each.
The sector’s blended monthly average revenue per user (Arpu), a key metric of profitability, is expected to rise by 20% owing to increasing tariffs, the ratings company said in a statement Wednesday. Fitch attributed the expected improvement to easing competition and growing data traffic due to the proliferation of affordable 4G handsets.
“We expect industry revenue to rise by 5%-10% in 2019 - the first growth in three years -underpinned by easing competition and growing data traffic with the proliferation of affordable 4G handsets,” said Singapore-based Fitch director Nitin Soni. “We expect blended Arpu to rise 10-20% to $1.6-1.7 (Rs 111-118) per month in 2019, underpinned by incumbents’ introduction of a minimum mobile tariff of Rs 35 per month and growing data use.”
Industry experts are hopeful of a turnaround, with some expecting a more stable market than before.“I don’t see a great uptick in churn and I don’t see hyper-competitive pricing going on... because of those factors, I would expect to see stability return to the market,” said Cellular Operators Association of India Director General Rajan S Mathews.
Indicating improvement in finances of all telcos, Fitch said the top three were likely to focus on profitability, with revenue market share stabilising at 30-33% each.
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