ICRA Upgrades Telecom Services Industry Outlook To 'Stable'

The telecom tariff hike along with the recent relief package offers sufficient headroom for the industry to fund capex for 5G tech upgrade, ICRA said

The telecom tariff hike along with the recent relief package offers sufficient headroom for the industry to undertake deleveraging as well as fund capex for 5G tech upgrade, rating agency ICRA said on Wednesday revising outlook on telecom services sector to 'stable' from 'negative'.

The hike coupled with consistent upgradation of subscribers to 4G from 2G and increase in usage of telephony services is expected to result in improvement in industry ARPU (average revenue per user) to around Rs 170 by the end of 2022-23, it said.

The telecom industry has implemented the long-awaited tariff hikes which have the potential to improve the industry ARPU levels to around Rs 170 by the end of 2022-23, according to ICRA.

"This will result in increased profit generation, which coupled with the relief package announced by the government, provides enough headroom for the industry to undertake deleveraging as well as fund capex (capital expenditure) for the technology upgrade to 5G," the agency said.