Telecom tariff hikes to ring in improved debt metrics in FY22: ICRA

New Delhi: Telecom service providers (telcos) are expected to dial in next round of tariff hikes over the next one or two quarters which is likely to drive revenue growth in the next financial year (FY2021-22), according to investment information firm ICRA NSE 2.91 %.

In the light of higher funding requirements arising from sizeable pay-outs towards adjusted gross revenue (AGR) liabilities, spectrum purchase, regular revenue share with the government and auction installments (which start from FY23), it is imperative for the players to embark on sustainable and sizeable expansion in the average revenue per user (ARPU).

ICRA said the ARPU expansion will result in revenue growth and given the high operating leverage, the margins are also expected to expand.