NEW DELHI: The Indian telecom industry is likely to reverse a two-year declining trend with a 7% revenue growth in 2020 fiscal owing to an expected increase in average revenue per user ( ARPU ) by 11%, ratings and research company CRISIL stated on Tuesday.ARPU levels will get an upward push from higher data usage and introduction of minimum recharge plans. However, CRISIL predicted that the overall subscriber base is likely to shrink by 4% and any price-led aggression could impact all telcos adversely.According to CRISIL, telcos may witness an increase in profitability with the earnings before interest, taxes, depreciation and amortisation (EBITDA) margins improving by approximately 350 basis points on-year to 31% in fiscal 2020.The combined EBITDA of the top three players (Airtel, Vodafone-Idea and Reliance Jio) is expected to improve to Rs 56,200 crore from Rs 46,100 crore a year ago, witnessing a sharp jump of over 20%.Capital expenditure (capex) has been high in the sector, and has accentuated as incumbents Bharti Airtel and Vodafone-Idea increased capex to counter 4G threat from the new entrant Reliance Jio in the last two years, CRISIL mentioned in a note.However, network capex for the top three telcos is expected to moderate to Rs 84,000-90,000 crore in fiscal 2020, compared with Rs 1 lakh crore in fiscal 2019.The ratings and research company suggested that the improvement in profitability and decline in capex, together with sizeable deleveraging plans, will support a reduction in debt to Rs 3.1 lakh crore, by March 2020.“Debt protection metrics are expected to improve, with the interest coverage and debt-to-EBITDA ratios touching 2.5 times and 5.6 times by March 2020, compared with an estimated 2 times and 7.7 times, respectively, as of March 2019,”said Nitesh Jain, director, CRISIL Ratings.“Despite the improvement, standalone debt metrics will remain weak. Overall credit profile will continue to be supported by deleveraging plans and sponsors’ support,” added Jain.In the last three years through fiscal 2019, weak cash accruals and high capex had pushed up the debt of the top three telcos to Rs 3.6 lakh crore from Rs 2.6 lakh crore. During the same period, the top three telcos raised almost Rs 1.5 lakh crore through equity infusion and asset sale and are further expected to raise Rs 75,000-80,000 crore in fiscal 2020.CRISIL believes that the telecom tariffs have bottomed out, as reflected in stable pricing and the fact that the top three telecom companies now have almost equal revenue market share.A protracted tariff war has pushed ARPU to a decadal low and the telecom industry has lost approximately 20% of potential revenue, tantamount to over Rs 40,000 crore in the past two years, CRISIL mentioned.“Pricing aggression is expected to remain moderate and selective in fiscal 2020, given the new entrant has revenue market share leadership in more than 50% of the 22 circles. Price logs maintained by CRISIL Research indicate the prices of prepaid plans of leading telcos have over the past six quarters converged at approximately Rs 4 per GB and have stabilised over the last two quarters,” said Hetal Gandhi, director, CRISIL Research.While rural markets continue to add subscribers given low tele-density. In the saturated urban markets, however, consolidation of dual-SIM into single-SIM subscribers will reduce the subscriber base.