According to the credit rating agency of India ICRA, Indian telecom companies may not have a positive outlook yet. The agency also confirms that the debt will remain raised because of the stiff competition in the industry.
Therefore, the telecom companies that wanted to revise their tariff plans will have to wait. Besides, the rupee depreciation along with the rise in the price of diesel will also reflect undesirably on the telecom industry.
As per the recent study, done by ICRA, the telecom industry will not be able to stabilize their position or bring change in their pricing strategy. The rivalry among the companies compels each of them to strive for an increased customer base.
The telecom secretary has announced that the sale of 5G spectrum will take place after the first half of 2019. However, ICRA says that the spectrum will come as an extra burden on the financially struggling telecom companies.
Since Reliance Jio Infocomm has entered the market in the last quarter of 2016, the telecom companies are facing extreme competition. The companies have encountered huge losses as the revenue generation decreased. The companies also started to lose their subscribers to Reliance Jio. Although the telecom companies hoped to stand up depending on the pricing strategy, now, the process will get delayed.
According to the estimation presented by ICRA, the debt of the telecom sector will come down to 4.2 lakh crore INR from what was 4.7 lakh crore INR in the first quarter of 2018. The agency concluded informing that the sector has faced even more decline in the profitability because of the pricing confusion.