New Delhi, Dec 12 (TIWN) Rating agency ICRA has maintained a negative outlook for the Indian telecom industry, which is grappling with AGR dues, notwithstanding the green-shoots of recovery.

The October 24 order by the top court on AGR has added to the woes of already distressed telcos, ICRA said in a report on Thursday.  According to ICRA, the substantial amount of payments as AGR dues will create additional pressure on balance sheets of the telecom operators.  “This comes at a time when the industry’s health was on the recovery track, on the back of deleveraging initiatives, moderation in capex intensity and restoration of pricing power,” it said.  Although clarity is awaited on the final outcome of review petitions filed by operators in the Supreme Court, ICRA believes that in case AGR dues have to be funded through debt, it has the potential to derail the deleveraging attempts by the industry.  Due to intense competition and pricing pressure in the recent years the average revenue per user (ARPU) of the industry fell from Rs 169 in the first quarter of fiscal 2017 to Rs 124 in the first quarter of FY2020. AGR in the same period fell from Rs 44,570 crore to Rs 28,650 crore, as per ICRA.