The head of the Cellular Operators’ Association of India (COAI) expects the country’s mobile operators to suffer at least three more quarters of losses as the current tariffs are not sustainable, Press Times of India (PTI) reported.
Rajan Mathews (pictured), director general of COAI, told PTI that high governments fees, including licence and spectrum usage charges, together with high spectrum costs have added to the operators’ problems, noting that 2018-19 will certainly be a “tough year” in terms of financial performance.
He said the industry already experienced two quarters of losses this fiscal year.
The country’s major operators have seen sharp drops in both profitability and revenue since Reliance Jio entered the market in September 2016 offering low-cost unlimited data and voice plans. Jio is already the second largest mobile player in India with 215 million subscribers and nearly a 19 per cent market share at end-June.
The latest Telecom Regulatory Authority of India figures showed operators’ gross revenue fell 10 per cent year-on-year to INR584 billion ($7.85 billion) in the April to June period. Post paid ARPU in Q2 2018 fell 21 per cent year-on-year to INR307, while prepaid ARPU dropped 9.2 per cent to INR59.
Mathews said it is difficult to see tariffs dropping much further, adding declining revenue would hamper the industry’s ability to invest in new technology to expand and improve coverage, the newspaper reported.
Bharti Airtel reported a net profit of INR973 million in its fiscal Q1 (ending 30 June), down from INR3.7 billion the previous year, with revenue falling 9 per cent to INR200.8 billion.Subscribe to our daily newsletter Back