Network OperatorsAirtel set to achieve 8 to 10 percent revenue growth: Moody's

Airtel set to achieve 8 to 10 percent revenue growth: Moody’s

A new report by Moody’s claims that Bharti Airtel will see its revenues growing by 8% – 10% over the next 12 – 18 months. The rise is based on strong demand for data combined with the increasing accessibility of affordable smartphones.

Moody’s predicts the aggregate average revenue of network providers in the Asia Pacific region will increase by 3%- 4%, stating its outlook for the industry is stable. According to the firm, growth is slowing slightly due to increasing mobile penetration rates and competition, but is still at a healthy level. Banglalink Digital Communications and Airtel lead the way at 8% – 10% growth.

Airtel Logo

As per PTI, a telecom operators growth rate in the region will be in line with its country of origin’s GDP development. So while developed markets like Australia, Japan, Singapore and Korea will see a 1% – 2% growth, emerging areas like Indonesia, Thailand, China and India can expect rates of 5% – 6% in the course of a year.

According to Moody’s, Airtel and Vodafone India are raising its 4G capex spending in order to be ready for Reliance Jio’s LTE bandwidth launch. Average capital spending as a percentage of revenue for the former is expected to stand at 25% in order to handle rising volumes of internet usage.

Also Read: Delay in Reliance Jio 4G rollout may hit plan to poach Airtel, Vodafone users

Moody’s thinks the capex of the ongoing year will go up based on the March 2015 spectrum auctions. Consequently, it feels Airtel’s adjusted capex/revenue will go from 28.4% in 2014 to peak at 40% in 2015, before declining to a more normalized figure of approximately 24% – 25% in 2016.

Furthermore, Moody’s said Reliance Communications’ capex will also lower once its partnership with Reliance Jio begins by the middle of 2016. It’s set to change from 21% for the fiscal year ending March 2016 to 9% in March 2017.

Related Articles

Latest Posts