Sunil Mittal hints at mobile services rate hike

He said that average revenue per user (ARPU) of ₹300 was required to make industry sustainable with lower end still paying ₹100 a month.

Bharti Airtel founder and Chairman Sunil Bharti Mittal on August 25 hinted at an increase in mobile services rates while stating that the average revenue per user (ARPU) was expected to cross ₹200 in the next six months.

He said 16 GB data consumption a month for ₹160 was a tragedy.

“You either consume 1.6 GB of capacity per month either at this price point or you may prepare to pay a lot more. We are not wanting USD 50-60 like the U.S. or Europe but certainly USD 2 for 16 GB a month is not sustainable,” Mr. Mittal said at an event.

He said that ARPU of ₹300 was required to make industry sustainable with lower end still paying ₹100 a month.

“But if your consumption is largely around watching TV, movies, entertainment and depriving other vital special services on to the networks, then you need to pay for that,” Mr. Mittal said.

He was speaking at the launch event of the book Some Sizes Fit All written by his colleague at Bharti Enterprises, Akhil Gupta.

Airtel reported an increase in average revenue per user at ₹157 in the first quarter that ended June 30, 2020. The rise in ARPU comes following an increase in tariff by Bharti Airtel in December 2019.

Mr. Mittal said that while telecom operators have served the nation during difficult times, the industry needs to invest in 5G, more optical fibres, submarine cables, etc.

“Businesses which are not telecom also need to adopt digital stories around them. You should see solid ARPUs building up in the next 5-6 (years) for industry to be sustainable. We are down to 2-3 players now. India is a very price conscious market. In six months time we should be crossing the mark of ₹200 for sure and ₹250 would be ideal,” Mr. Mittal said.

Telecom operator Bharti Airtel has reported widening of losses to ₹15,933 crore for the June quarter — its fifth straight quarter of decline — as the telco made additional provision for statutory dues.

The company had been struggling to make margins due to tariff war triggered by Reliance Jio in 2016 and the Supreme Court order in favour of the government on statutory dues added to its woes.

During the June quarter, the company recorded an incremental provision of ₹10,744.4 crore towards Adjusted Gross Revenue (AGR) dues it owes to the government. Bharti Airtel owes ₹25,976 crore in balance AGR dues, after paying ₹18,004 crore.

Mr. Mittal said that companies need to scale up their business and Airtel recognised the opportunity in acquiring One Web, a 648 satellite constellation that will cover “the entire world from ocean to mountains and deserts. “

“One Web was a global opportunity. It includes India. We are very excited about setting up its capacity in India as well. We are working hard towards that process as well. It’s a business that we understand. It’s a telecom network in space. We are very excited that we are going to bring a very latency signal to customers in these areas who will never ever see broadband,” Mr. Mittal said.

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