Telcos need to boost ARPUs by 25%, may have to hike tariffs again: Crisil

Telcos need to boost their average revenue per user (ARPU) by at least 25 per cent in the next year to be sustainable, which would result in another round of tariff hikes, domestic rating agency Crisil said on Wednesday.

It said the returns on capital employed are abysmally low for telcos at present and also considering the Supreme Court ruling on Adjusted Gross Revenue (AGR), which has created huge liabilities.

Apart from the tariff hikes, which were last done in December 2019, the telcos will need to up the number of users opting for the more expensive 4G offerings and also bundle plans with content, it said, adding that the industry can invest in 5G only through ARPU growth.