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Telecom companies have started offering 5G services in select cities but they will have to spend Rs 3 lakh crore in the next four-five years on creating proper network infrastructure. Rating agency Icra has expressed this estimate. Icra Ratings said in a statement on Monday that telcos will have to make substantial investments to reach a position to offer 5G services across the country.
Icra said, “Only about 35 percent of India’s towers are connected with fiber. In such a situation, we expect to make a capex of about three lakh crore rupees in the next four-five years to make the towers fiber-based in the appropriate number. Will happen. Only then can a strong network base be built across the country.”
Along with this, the agency said that there has been a steady improvement in the operating standards of telecom service providers, but their debt levels still remain at a high level. It is estimated to be around Rs 6.3 lakh crore. According to ICRA, the Average Revenue Per User (ARPU) has crossed Rs 170 mark in the first half of the financial year and is likely to cross Rs 180 by the end of March 2023.
The rating agency said that the adjusted gross revenue (AGR) of telcos has grown strongly in the last few quarters on the back of rising revenue. But the debt of telcos is still high and after the new round of spectrum auctions, this burden has further increased.
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