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Telecom Industry’s ARPU to Grow by 5 to 10 Per cent by FY21

During this Covid-19 pandemic, major economy loss has been seen but if we talk about telecom industry it is showing tremendous growth from the last three months, says Fitch Ratings report.

The reports says that, Indian telecom operators reported strong revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) growth in the three months ending June (Q1 FY21) due to tariff growth and higher data usage, defying the economic slowdown from the countrywide lockdown of 68 days up to May-end.

According to Fitch Ratings, revenue market share continues to consolidate with market leader Reliance Jio and Bharti Airtel as the third-largest telco Vodafone Idea is losing 10 million to 15 million users per quarter.

“Indian telcos are likely to weather the coronavirus-led slowdown as we forecast the industry mobile segment’s EBITDA to grow by 25 to 30 per cent year-on-year (FY20: 25 per cent) despite expectations for Indian GDP to contract by 5 per cent during this period,” said Fitch’s report.

Robust growth will be driven by sustained higher tariffs, feature-phone user migration to 4G and high monthly data usage of 12 to 16 GB per user, one of the highest globally.

Data traffic surged by 20 to 30 per cent as the lockdown increased demand for data connectivity and remote access which more than offset the slower migration of feature-phone users to 4G as smartphones sales declined by 48 per cent in Q1 FY21.

Jio’s revenue and EBITDA grew by 34 per cent and 55 per cent respectively while Bharti reported Q1 FY21 Indian mobile revenue and EBITDA growth of 19 per cent and 35 per cent year-on-year.

Bharti reported a 21 per cent rise in monthly average revenue per user (ARPU) to Rs 157 as Jio reported 8% growth to Rs 140. Jio was boosted by 67 million net subscriber additions year-on-year to 398 million while Bharti was flat at 280 million.

Fitch expecting industry ARPU(Average  revenue per user) to grow by around 5 to 10 per cent in FY21 as users upgrade gradually to higher-tariff 4G price plans. We estimate 250 million to 300 million users still use 2G technology.

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Nitisha Dubey

A diligent writer, who has been working from last five years in the same field. She has covered lots of event and expo for travel & judiciary, now covering technology. Book reading, exploring different destinations and varieties of cuisine are some hobbies. Love to watch biographies and historical movies.

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