Statsguru: Tough times ahead for telcos

The telecom sector is headed for tough times. The sector’s top line contracted by five per cent in Q3FY17 as shown in Chart 1. This is unlikely to be a one-off case with projections showing a steeper contraction in Q4FY17.
 
With Reliance Jio unleashing a tariff war, other telecom operators rushed to match its offers. As a consequence, average revenue per user (ARPU) has fallen as shown in Chart 2. The decline in data revenues is much steeper as seen in Chart 3.
 
And while consumers have benefited from the sharp fall in tariffs, it has hit the