The operating profit growth rate of mobile service providers is expected to double in next two years buoyed by increase in call rates and clarity in policy, credit rating agency CRISIl has said.
CRISIl forecast a 20 per cent increase in the operating profits of large telecom companies over the next two years. "That's twice the operating-profit CAGR of about 10 per cent seen in the last five years," the statement said.The rating agency added that while there has been already increase in tariffs in last few months, the signs of clarity in policies will add to its growth.
"Our estimates show there is still a 50 per cent gap between headline tariffs and ARPM (average revenue per minute) due to discounted call rates offered to many subscribers. With competitive intensity easing, telcos are in a better position to reduce the discounts and crunch the gap," CRISIl Rating's Senior Director Sudip Sural said in a statement.