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Your mobile bills could rise in 2023 as telcos focus on profitability

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Fitch ratings expects telecom operators to increase rates in 2023, given the focus on service provider profitability.



The rating agency said categorically Vodafone ideathe third-largest telco, has to raise rates because EBITDA generation is insufficient to cover financing costs and invest enough in capital expenditures.

The last time the Indian telecom operators raised rates was at the end of 2021.

“We have only one market with an improving outlook – India – compared to two (India and Malaysia) in 2022. Only one market – Sri Lanka – has a deteriorating outlook. Consolidation is likely to continue in most markets as weaker participants face choice to buy or decline,” the report read.

Indian telecom operators, in particular, continue to have some of the lowest monthly average revenue per user (USD 2.5) and the highest monthly data usage (20 GB) in the world.

Furthermore, market leaders said Trust Jio and Bharti Airtel will continue to consolidate market share as they will garner 80-85 percent of private telecom operators’ revenues over the 2023-2024 period, compared to 81 percent in 2022.

Bharti Airtel, it said, will maintain its 35 percent market share for active subscribers, while Vodafone Idea will continue to lose market share given its extremely weak financial position.

on AGR postponement, the Fitch report said that the government’s decision to defer for four years the amount of adjusted gross revenue (AGR) and spectrum rights, the future exclusion of non-telecom revenue from the definition of AGR and the abolition of spectrum usage charges in recent spectrum auctions will boost telecom operators’ cash flow.

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