New Delhi, Mar 25: Even as India's mobile telephone subscribers increase, slower growth in revenue and more network investments would mean most of the telephone companies won't be able to wipe out their accumulated losses soon, quoting an ICRA Ltd. report. ICRA, a rating agency, warned that the possibility of lower revenue growth, lower profitability and continuing accumulated losses, could inhibit the flow of large long-term financial investments into the industry.
"For the operators the already high risks are increasing," ICRA said in a report. The government's Unified Access License regime that put GSM (global system for mobile communication) and CDMA (code division multiple access) operators on a level platform last year, has stiffened competition further and lowered tariffs. This has thus put companies' revenue under pressure, the ICRA report said.
"The weaker operators would then be forced to enter into strategic alliances or divest equity in favor of stronger players," the ICRA report said. Bureau Report