Telcos to spend less on 5G spectrum in next auction : Crisil
telcos are likely to spend less on 5G airwaves in the next auction compared to the last one in July 2022 as they have adequate spectrum holdings, ratings agency Crisil said.
“All private telcos are believed to be adequately placed, having purchased spectrum worth Rs 1.5 lakh-crore in the previous auction…hence, the outgo for spectrum purchase at the next auction is expected to be lower than the previous one,” Crisil said in an official statement Monday.
The government had mopped up over Rs 1.5 lakh-crore from India’s first auction of 5G spectrum last year, selling around 71% of the over 72 GHz of airwaves it put on the table.
The Department of Telecommunications (DoT) has recently set the ball rolling for the next 5G spectrum auction by sending a reference to the sector regulator, seeking reserve prices for various bands estimated to be worth Rs 2.5 lakh-crore.
Naveen Vaidyanathan, director, Crisil Ratings, said large spectrum investments last fiscal had resulted in debt of telcos (including lease liabilities) rising to Rs 6.3 lakh-crore as of March 31, 2023, from Rs 4.6 lakh-crore as on March 31, 2022.
“Investments for 5G services could result in that number rising to Rs 6.5 lakh crore by the end of FY24, but the leverage of telcos rated by Crisil should improve because of better profitability,” he said.
Their ratio of debt to Ebitda is foreseen at 3 times this fiscal, compared with 3.3 times last fiscal, he added.
Crisil estimates India’s telcos will collectively report 15-17% on-year growth in operating profit (read: Ebitda) to Rs 1.2 lakh-crore in FY24, on the back of strong demand for bigger data packs amid surging consumption, ratings agency Crisil said.
“Growth would be driven by rise in data usage to 23-25 GB per
