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Revenue of telecom operators sinks 1.7% in March quarter

Author: PTI/Thursday, June 28, 2018/Categories: Telecom

Revenue of telecom operators sinks 1.7% in March quarter

New Delhi - The gross revenue of telecom operators slipped 1.76% year-on-year during the quarter ending March 2018, while licence fee and spectrum charges, that government collects from them, fell 12.7% and 23.4% respectively, according to a Trai report.

The adjusted gross revenue or AGR earned by companies from sale of telecom services dropped over 12.5% to Rs 35,697 crore during the January-March quarter 2018 from Rs 40,831 crore in the year-ago period.

"Gross Revenue (GR) and Adjusted Gross Revenue (AGR) of telecom service sector for the quarter ended March 18 has been Rs 62,198 crore and Rs 35,697 crore respectively...

The year-on-year growth in GR and AGR over the same quarter in last year has been -1.76% and -12.57%, respectively," Trai said in the quarterly update it gives on the performance of Indian telecom services market.

The gross revenue during January-March 2018 fared a tad better by 1.8% compared to the previous quarter. However, revenue that operators derive purely from telecom services fell (7.37%) even on quarter-on-quarter basis.

The licence fee which is collected from telecom service providers on the basis of adjusted gross revenue fell 12.76% year-on-year to Rs 2,932 crore in March quarter, while spectrum usage charges realisations fell more sharply by 23.4% on yearly basis.

The spectrum usage charges collected by the government stood at Rs 1,051 crore in March quarter, lower than Rs 1,152 crore derived in December 2017 and Rs 1,372 crore in the quarter ended March 2017.

"Monthly Average Revenue per User (ARPU) for Access Services based on AGR, declined from Rs 80.77 in quarter ended December 17 to Rs 71.62 in quarter ended Mar-18," the Telecom Regulatory Authority of India (TRAI) said in its report.

The scorecard reflects financial difficulties that the sector is facing where a brutal tariff war has dented the profitability and operational metrics of most operators.

According to Trai, the number of telephone subscribers in India rose to 120.6 crore at the end of March 18, from 119 crore in the December quarter, growing 1.31% sequentially.

The telecom sector in India - with second largest subscriber base globally - is undergoing financial stress, prompting a spate of consolidation that is expected to leave in its wake only 4-5 national level players.

The newest and the most aggressive entrant in the telecom sector, Reliance Jio, has sustained a bruising tariff war in the Indian telecom market, with its free voice and rock-bottom data offerings, challenging the established operators like Airtel, Vodafone and India Cellular whose revenue and profitability have come under tremendous pressure.

Cellular Operators' Association of India (COAI), in its annual report for FY18, has noted that the telecom operators are in "severe financial distress" with a cumulative debt of Rs 7.7 lakh crore and revenue under Rs 2.5 lakh crore.

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