5G adoption on a roll in India, yet tariff upside may be minimal: Ind-Ra

India’s 5G subscriber count is seen rising several notches to 2025 per cent of the overall base in one year, but though telcos are in a “better position” to execute tari” increase, actual visibility on a “meaningful” increase remains uncertain, Ind-Ra said.

According to India Ratings and Research (Ind-Ra), this is because globally too 5G has not yielded any major tari” premium over 4G rates.

The use cases of 5G in India are still limited to applications such as video streaming and multi-person video calls.

The Fitch Group company, in its telecom outlook FY25 has maintained a neutral outlook on the sector for the current fiscal. It expects the subscriber base to reach 20-25 per cent over the next one year from about 17 per cent currently, in line with global experience.

Average revenue per user (ARPU), it said, may continue to exhibit organic growth albeit the growth rates, per se, have tapered somewhat. Ind-Ra believes Reliance Jio and Bharti Airtel have an opportunity to capture a higher proportion of premium subscribers of Vodafone Idea, who are keen to experience 5G. Accordingly, it has predicted another round of market share shifts.

BETTER MARGINS

The agency said the current fiscal would be an inflection year for telecom companies in terms of investments peaking out (5G capex, spectrum renewal) and the tari” environment remaining subdued.

According to its assessment, the investments have likely reached their peak in FY24, given that the execution of industrywide 5G capex of around $20 billion was almost in the last leg by end-FY24. Overall, Ind-Ra expects the margin structure of telcos to improve in FY25, owing to revenue growth supported by operating leverage.