Telecom Regulatory Authority of India (TRAI) has come up with mixed news for telecom investors via its performance indicator report. Telecom services, which had been falling for several quarters have stabilised recently.
However, while telecom companies hold on to tariffs and maintain revenues, volume growth came off significantly in the March quarter.
According to the analysis by Kotak Institutional Equities, an average of consumer spends on mobile services stood at around Rs 35,000 crore in the quarter ended March, including goods and services tax. This explains to an annual spend of ?1.4 trillion, 5% higher than the lows of ?1.34 trillion in the September 2018 quarter.
“Despite the likely stabilisation of revenues and possibly profitability, telcos would continue to rely on external funding arrangements to support their debt servicing and elevated capex requirements,” India Ratings and Research said in a note.