Covid-19 has reinforced the role of telecom services as the backbone of Digital India, with continued uptick in e-commerce and over-the-top streaming leading to a surge in demand for bandwidth and connectivity.
The sector requires huge capital outlay because of continuous technological evolution. Telecom companies (telcos) spent nearly Rs 1.5 lakh crore in the spectrum auction concluded in August 2022 - almost twice the spectrum outlay in the March 2021 auction - bringing India one step closer to the launch of 5G services.
While the timeline for telcos to clear their humongous spectrum dues has been extended, increase in cash flows remains critical to enhance their return on capital amidst another round of capital expenditure (capex) for the mass 5G rollout.
Over the past few quarters, improvement in average revenue per user (ARPU) has largely come from uptrading by customers, while broad tariff revisions were last effected in November 2021. Is this enough to materially drive cash flows and returns? The jury is still out on that.
Several other questions arise at this stage. Do telcos have healthy balance sheets to fund another round of substantial capex? Will they bite the bullet for a broad-based tariff revision?
For answers, experts from CRISIL Ratings will make a presentation covering:
Outlook on the growth of data consumption, subscriber base and ARPU
Trends in revenue and profitability
Outlook on capex
5G rollout status and infrastructure readiness
Credit outlook on the telecom sector
This will be followed by a panel discussion and a Q&A session.
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