By India Ratings and Research India Ratings and Research (Ind-Ra) has maintained a negative outlook on the telecommunications services sector for FY20. Ind-Ra believes the pricing recovery in FY20 is unlikely to be sufficient to compensate for the revenue loss witnessed in the preceding two years. The Ebitda for the top two private telcos will improve but not to the extent that it would lead to any meaningful recovery in their standalone credit profiles. Ind-Ra expects Reliance Jio Infocomm\u2019s (RJio) dominance to increase as it would continue to seize market share in terms of both subscribers and revenue from Bharti Airtel (Bharti) and VodafoneIdea (Voda-Idea) in FY20 and could eventually emerge as the largest telecom player in the industry. Given the continued capex commitments, refinancing requirements would remain high for all the players. As a result, free cash flows would remain negative in FY20. The aggregate net debt of Bharti, Voda-Idea and RJio at endFY19 is estimated to be around `3 trillion, implying net leverage of over 6x for the sector. Telcos will continue to require equity infusion and asset monetisation to deleverage. The focus of operators will eventually shift to average revenue per user (ARPU) from subscriber market share, in Ind-Ra\u2019s opinion. The share of 4G subscribers, who offer higher ARPU, will be a critical profitability indicator and RMS will evolve accordingly. Revenue growth would be uneven across telcos and RJio is positioned to outperform peers with its superior offerings. Overall subscriber growth will remain muted in FY20, or it could even witness a decline, as India is a dual-sim market, which could consolidate with ARPUs trudging upwards. The ARPU is likely to improve over H2FY19-FY20 as the minimum recharge plans launched by Bharti and Voda-Idea will weed out low ARPU customers. As highlighted continually by Ind-Ra, network quality will be a key success factor for retaining customers.