The import of telecommunication gear can cost more in case of falling the rupee

KOLKATA: The fall of the rupee to a historic low against the US dollar should push up the costs of imported telecom equipment used in mobile phone networks by nearly Rs 4,500-5,000 crore and exacerbate the financial stress of telecom operators, convincing They plan to postpone expansions of the 4G network in the short term if the Indian currency remains weak, said industry executives and badysts.
The steady fall of the rupee against the greenback could also increase the costs of servicing the external debt of some telephone companies and increase their profitability in the coming quarters, as up to 30% of the debt of 7 , 7 million rupees of the sector is said to be denominated in dollars. The local unit hit a record intraday low of $ 69.09 on Thursday. However, the rupee recovered some of its losses on Friday and closed at $ 68.47.

80% of telecom equipment used in local telephone networks are imported from foreign providers such as Ericsson, Nokia, Huawei, Samsung and ZTE, which is why large operators such as Bharti Airtel, Vodafone India, Idea Cellular and Reliance It is estimated that Jio Infocomm will invest nearly $ 7 billion annually (more than 48,000 rupees in rupees) on network equipment. "As a result, the sharp decline in the rupee is expected to increase the import bill of mobile network devices for the sector by 8 to 10 percent," said a telecom badyst from a major global brokerage firm, under the guise of anonymity.

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