Steep tariff hikes may double telecom industry’s EBITDA next fiscal: CRISIL

NEW DELHI: The steep tariff hikes of up to 50% being implemented by telecom operators – Airtel, Vodafone Idea and Reliance Jio — have the potential to double the industry’s EBITDA next fiscal, which is a structural positive for an industry weighed down by weak cash flows and mounting debt, CRISIL Ratings said in a statement.

This CRISIL expects the leverage ratio (debt/EBITDA) of the industry to improve to 4.6 times next fiscal from 7.5 times in fiscal 2019 – if the EBITDA improves as expected – and after factoring in licence fee payouts following a recent Supreme Court order.