No more telecom tariff cuts; companies look at earnings rebound even with falling user base

The Indian telecom industry has been suffering with merely one or two operators showing growth in their subscriber base and revenues, as shown by the recent TRAI data. However, this could be about to change in FY20 as the telco’s revenue may rebound at 7%, a CRISIL report said. Attributing this rebound to hike in average revenue per user (ARPU) by 11%, the report said that the initial price aggression among companies is no longer beneficial. It further said that the subscriber base is going to fall by 4%.

The fall in ARPU was a result of tariff war which was perpetuated by Mukesh Ambani’s entry in the telecom industry with Reliance Jio. “In the past two years, the industry has lost about 20% of potential revenue, tantamount to over Rs 40,000 crore,” The CRISIL report said.

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