Interesting topic. Your assessment is largely correct. Let me put down what i think would happen to companies acting as lessee’s(say Airtel, Indigo, Jet etc) and as lessors(say Bharti Infratel)
As a lessee:
The primary issue would be that what is considered opex today would be moving to balance sheet(which would make the balance sheet bulky to say the least). My assessment is that if companies can make appropriate adjustments to the useful life of assets and and discounting rates the P&L will not have any significant impact. I think this would largely be a 2 quarter phenomena and the industry will just move on. To summarize - all Airline and Telecom companies having a strong balance sheet will survive in the long run and others will perish irrespective of any change in accounting standard.
As a lessor:
SEC has brought in a practical expedient(ASU 2018-11 issued during June 2018) to ASC 842(US GAAP equivalent to ASC 116) which would help companies(as lessors) to continue accounting for operating lease the way it is today. Considering the track record of standard setters in India - it is highly likely that we would follow the suit.
The crux of this ASU is as below:
“Specifically, an entity should determine whether the nonlease component (or components) associated with the lease component is the predominant component of the combined component. If so, the entity is required to account for the combined component in accordance with ASC 606. Otherwise, the entity must account for the combined component as an operating lease in accordance with ASC 842.” - which simply means that if the objective of the contract is to provide pure service and lease of asset is only used as a tool for delivery of such services then one can directly use the principles under revenue recognition standard(ASC 606/ Ind AS 115) instead of lease standard.
Adoption of this practical expedient would reduce the head ache of telecom industry significantly as service is the larger component of telecom industry.
Anyone interested in the original text of this ASU can refer here