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Indian operators not investing enough in networks

Bharti Airtel has grown to 300m users

Over the next two years Indian operators plan to invest a significantly lower proportion of their revenues than their Chinese, Indonesian and Philippine counterparts, according to financial ratings agency Fitch Ratings.

The firm believes the low level of investment is attributable to the weaker balance sheets of the Indian operators in comparison to other Asian carriers. According to Fitch Ratings, Indian operators’ balance sheets have become stretched due to intense competition and large spectrum payments between 2010 and 2012.

The Indian, Chinese, Philippines and Indonesian telecoms markets are at approximately the same stage of data penetration, according to the agency. However, it stated that Indian telcos have indicated that their capital expenditure will decline over the next two years, while it is set to increase in the three other countries.

Capex per subscriber for Indian operators stands at $6 per subscriber, much lower than in China where it is over $50 per subscriber and in Indonesia and the Philippines, where both are spending $16 per cent subscriber.

Operators in these markets plan to invest in data infrastructure to expand their 3G and long-term evolution (LTE) networks over the period. Chinese telcos, for example, have raised their 2013 capex forecasts by 12 to 15 per cent, Fitch noted.

The agency also found that India is the most congested market of those studied. Subscribers per MHz of spectrum per operator for Indian telcos stands at around 10 million to 15 million, compared with five to six million for Chinese, Philippine and Indonesian telcos. This indicates that Indian telcos may need to invest more to decongest their network, Fitch Ratings concluded.

The LTE Asia conference is taking place on the 18th-19th September 2013 at the Suntec, Singapore. Click here to download a brochure for the event.


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