The recent tariff increase and moratorium on government dues will give telcos room to invest an estimated up to ₹1.8 lakh crore for 5G services, according to rating agency Crisil.
The agency said that after having invested about ₹5 lakh crore over the 2017-2021 period to roll out 4G services, they would now need to invest in the 5G roll-out before reaping returns.
“We foresee investments of at least ₹70,000 crore at the 5G spectrum auctions likely next fiscal — if the bidding is prudent.
“But the four-year moratorium on government dues announced by the Cabinet recently could provide annual cash flow relief of [about] ₹32,000 crore over the next four years,” Crisil added. It said an estimated 20% improvement in the average revenue per user per month, rung up by recent tariff hikes and ongoing customer upgrades, could lift the operating profit of the sector by 40% to ₹1 lakh crore in fiscal 2023 compared with fiscal 2021.
