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Tanu Sharma, Associate Director,India Ratings & Research
Outlook for the Indian telecom sector appears brighter as regulatory overhang has moderated and headwinds of competition have subsided. Improving mix of average revenue per user, jump in data usage, and lower discounts have improved the operating margin dynamics for telecom companies. Consolidation of revenue market share, subscriber base, and spectrum in the hands of top telecom companies are emerging as key trends. However, significant investments are expected for securing of existing resources (spectrum) and funding of growth.
FY 2014 (financial year ended March 2014) witnessed margin expansion for top telecom companies in the range of 200-400 bps, with Idea being the front runner. The revenue market share and subscriber market share of top three telcos (Bharti Airtel, Vodafone, and Idea Cellular) also improved during FY 2014 further marginalizing smaller operators...