Backhaul infra to cost Rs 3L cr on 5G rollouts in 5 yrs

New Delhi: Telecom players have started rolling out 5G services in select pockets, but backhaul infrastructure will cost Rs3 lakh crore over the next 4-5 years, according to ICRA. ICRA noted consistent healthy improvement in operating metrics of telcos, but added that debt levels continue to remain high and seen at around Rs6.3 lakh crore as on March 31, 2023. The full scale 5G deployment across the country will entail densification of the network and thereby sizeable investments in fiberisation, it contended.

"India currently has around 35 per cent of its towers fiberised and the rating agency expects that the capex required to fiberise the adequate number of towers to provide a sturdy network base would be close to Rs 3 lakh crore over the next 4-5 years," ICRA said in a statement. The telecom industry, it noted, has continued to report healthy improvement in operating metrics, as reflected by improvement in ARPU (Average Revenue Per User) levels and consistent growth in telephony usage. ARPU has already crossed Rs 170 mark in the first half and is likely to touch Rs 180 by the end of the fiscal. This has translated into healthy growth in industry AGR (Adjusted Gorss Revenue) over the last few quarters.

"However, the debt levels continue to remain high and the same further increased post the conclusion of the last round of auctions," it said. While in the core business, technology upgradation to 5G is likely to drive growth going forward, along with the upgradation of a large pool of subscribers to higher technology, the non-telco businesses, which include enterprise business, cloud services, digital services and fixed broadband services will also remain crucial for chartering a growth path for the industry. The core business is experiencing consistent improvement in operating metrics, however, the debt levels continue to remain elevated, thereby leading to moderation in the credit metrics of the industry.