Telcos’ peak 4G capex cycle is over: ICRA

New Delhi: Indian telecom operators’ peak capital expenditure (capex) cycle is over with the industry achieving a sizeable penetration for 4G across the country, and the capex intensity is only expected to witness moderation till the time there is a technology upgrade to 5G, ratings firm IcraNSE -1.08 % said. The capex intensity, as measured by the capex/sales ratio, has been significantly higher – at over 50% compared with international standards of 17-18%, especially in the past few years, Icra said in a note on Thursday.

“The capital expenditure incurred by the telecom operators for expansion and upgradation of the network has remained high on account of increasing data requirements, changes in tech and spectrum acquisition,” Ankit Jain, assistant vice-president, corporate ratings, Icra, said in note. He further said that spectrum acquisition accounts for a majority of capex, and thus, debt for the industry.