0utlook for telecom operators likely to be negative in 2012: Fitch

The 2012 outlook for most Indian telecommunications operators is negative, as the nationally-owned and six smallest private telcos will continue to suffer operating losses, Fitch Ratings said in a special report released today.

Fitch expects that the fifth- and sixth-largest operators may manage to break even in EBITDA terms in 2012.

Fitch notes that the final version of the National Telecom Policy (NTP) and Spectrum Act 2012 should bring much needed regulatory clarity on the issues of spectrum-refarming, the imposition of spectrum renewal fees, and one-time charges for excess spectrum.

However, the 10 October 2011 draft NTP proposals to allow spectrum-sharing and trading, on voice over internet protocol (VoIP) and for the removal of national roaming charges present a challenge to the top four telcos.

Although India is one of the most competitive telecom markets in the world, Fitch expects that 2011's stable pricing environment will be sustained through 2012.

Bharti Airtel Limited's ('BBB-'/Negative) initiative to raise on-net voice and SMS tariffs by 20 per cent was followed by most of its competitors. Fitch, therefore, expects average revenue per minute to remain steady, at about Rs0.41- Rs0.44, in 2012.