Indian telcos need to increase ARPUs by 13-30% annually for long term sustainability

NEW DELHI: Indian telecom operators will have to increase their ARPUs annually by 13-30% to be able to meet the AGR related payouts along with the existing debt repayments as well as the spectrum installments which will start from FY2023, ICRA said in a note.

The industry ARPU will have to increase to Rs. 200 in the medium term for viable operations and thus, further tariff hikes cannot be ruled out.

ICRA said that the greenshoots of recovery have been visible for the industry in terms of steady ARPU improvement substantiated by the tariff hikes implemented in December 2019, along with the deleveraging measures undertaken by the telcos and moderation of capex intensity, the uncertainties around the AGR issue persist.