Business Other News 25 Oct 2018 Telcos to keep bleed ...

Telcos to keep bleeding, says Moody’s

DECCAN CHRONICLE.
Published Oct 25, 2018, 12:28 am IST
Updated Oct 25, 2018, 12:28 am IST
This is despite the fact that the telecom sector has just witnessed a wave of acquisitions and mergers (M&As).
Moody’s said that Bharti Airtel’s leverage will remain elevated barring significant asset sales or other monetisation activities that provide proceeds for debt reduction.
 Moody’s said that Bharti Airtel’s leverage will remain elevated barring significant asset sales or other monetisation activities that provide proceeds for debt reduction.

New Delhi: Indian telecom players, who are involved in an intense competition, are unlikely to see any increase in average revenue per user (ARPU) soon, according to global ratings agency Moody’s Investor Service in a report on Wednesday.  

This is despite the fact that the telecom sector has just witnessed a wave of acquisitions and mergers (M&As).

 

Moody’s Investor Service said in a report that though consolidation points to 3-4 player market with a more rational pricing environment emerging in the longer-term, but there is no near-term catalyst for a rise in ARPUs.

It said that while data revenue maintains strong growth, it is unable to offset declines in traditional voice and SMS revenues in market such as India.

Moody’s said that Bharti Airtel’s leverage will remain elevated barring significant asset sales or other monetisation activities that provide proceeds for debt reduction.

 

“Bharti’s consolidated revenues reflect subscriber growth and stable operations in Africa, which partially offset the Indian mobile segment,” it said.

The entry of the deep-pocketed Reliance Jio in September 2016 has put tremendous pressure on entrenched players. While falling income and profits along with rising debt forced Voda-fone and Idea to merge and create the largest telco as Vodafone Idea last year, Reliance Com-munication was forced to quit the consumer side of its business.

In a broad comment on companies in emerging markets, it said capital expenditure will continue to be at a high of over 30 per cent of revenue.

 

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