Wednesday, 25 April 2018

Indian telcos to see 40% drop in revenue

By Chris Kelly, Total Telecom
Sunday 15 April 18

Ratings firm Crisil has predicted that financial reporting for Q1 2018 could mark a new low point for Indian telcos

India's beleaguered telecoms sector is preparing for another set of harsh financials in Q1 2018, with revenues set to tumble by a further 40 per cent.  "The competitive intensity in the telecoms industry further intensified since January 2018 after the new entrant started passing on the benefits of cut in interconnect usage charges to customers through lower tariffs…

India's beleaguered telecoms sector is preparing for another set of harsh financials in Q1 2018, with revenues set to tumble by a further 40 per cent. 

"The competitive intensity in the telecoms industry further intensified since January 2018 after the new entrant started passing on the benefits of cut in interconnect usage charges to customers through lower tariffs," said ratings firm Crisil in its latest report. 

India's telecoms sector is beset by ultra low profit margins, fuelled in part by Reliance Jio's game changing focus on delivering low cost, unlimited data deals to its customers. 

India's financial reporting for Q1 2018 could mark a low point, according to some analysts, as operators try to weather the stormy market conditions. 

The Times Of India quoted Kotak Securities as saying that the first quarter of 2018 would be an extremely challenging set of results.

"Jio's pricing moves in the month of January 2018, impact of international termination rate (ITR) cut effective February 1, 2018, and continued ARPU downtrading are likely to reflect in another quarter of sharp sequential revenue decline for the incumbents," it said.

Reliance Jio's provision of ultra low cost voice and data tariffs has led to genuine concern over the sustainability of India's telecoms market, with a slew of mergers and acquisitions vie for approval in an attempt to stave off bankruptcy for India's key players. 

 

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