ICRA Upgrades Telecom Tower Industry Outlook to 'Stable' Amid Improved Payments

New Delhi, May 19 (KNN) Investment Information and Credit Rating Agency (ICRA) has revised its outlook for India's telecom tower industry from 'Negative' to 'Stable'. 

This change is attributed to timely payments from key customers and the clearance of past dues, which have eased the receivables cycle for telecom tower companies.

ICRA noted that the average receivable days have reduced to approximately 45–60 days, below the 80-day threshold that previously warranted a negative outlook. 

Ankit Jain, Vice President and Sector Head at ICRA, stated that the improved credit profiles of major telecom service providers have facilitated this positive shift.

The agency projects that collections will remain timely, keeping industry debtor levels below 60 days. 

This is expected to lead to a reduction in external debt, with net external debt to operating profit before depreciation, interest, taxes, and amortisation (OPBDITA) projected at around 3.4 times for the fiscal year 2026.

Additionally, the demand for telecom services, particularly data, is driving consistent network expansion and upgrades by telecom companies. This trend is benefiting tower companies through steady additions in tenancies. 

ICRA anticipates the telecom tower industry to experience an operating income growth of 4–6 per cent with operating margins around 70–75 per cent for FY2026. 

The improved liquidity position, aided by easing working capital requirements, is expected to bolster the industry's cash balances, further strengthening its financial health.

This outlook revision marks a significant turnaround for the telecom tower sector, reflecting enhanced financial stability and growth prospects.

(KNN Bureau)