New Delhi | Jagran Tech Desk: Indian telecom companies could undertake the next round of tariff hikes in the coming months, which is expected to drive revenue growth in the next financial year, investment information firm ICRA has said. The increase in tariffs would have a direct impact on mobile data and calling prices. 

The service providers may see a revenue growth of 13 per cent in the next fiscal year due to improved Average Revenue Per User (APRO) and increase in the data usage. The trend of increased data requirements and subscribers moving from 2G to 4G will likely to continue next year, according to a report by Dainik Jagran. 

It is imperative for the players to embark on sustainable and sizeable expansion in the average revenue per user (ARPU) considering the higher funding requirements arising from sizeable pay-outs towards adjusted gross revenue (AGR) liabilities, spectrum purchase, regular revenue share with the government and auction installments (which start from FY21), ICRA said, as quoted in a report by ANI.

"Tariff hikes and upgradation of subscribers from 2G to 4G is expected to result in improvement in ARPU to around Rs 220 in the medium terms,” Said Anupama Arora, Vice President and Sector Head for Corporate Ratings at ICRA.

In terms of the core business, 5G, which has already been launched in some countries, will be the growth driver. 

“However, given the high spectrum prices, the nascent stage of the eco-system, the relatively low penetration of 4G services and limited paying capacity of the Indian customers coupled with the precarious position of the balance sheets of telcos is likely to play a spoilsport in the technology upgradation to 5G,” said Ankit Jain, Assistant Vice President at ICRA. 

Posted By: Lakshay Raja