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Bharti Airtel expects next tariff hike to help cross 200 ARPU mark

During Q4FY22, Airtel posted a consolidated net profit of  ₹2,007.8 crore rising by a breath-taking 164.46% from  ₹759.2 crore in the same quarter last year. (MINT_PRINT)Premium
During Q4FY22, Airtel posted a consolidated net profit of 2,007.8 crore rising by a breath-taking 164.46% from 759.2 crore in the same quarter last year. (MINT_PRINT)

  • Airtel's ARPU rose to 178 in Q4FY22 compared with 145 in Q4 of last year and 163 in the preceding quarter.
  • In Q4FY22, Airtel's mobile customer base in India climbed by only 1.5% to 32.6 crore from 32.1 crore in the same quarter a year ago.

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Telecom major, Bharti Airtel intends to reach its target of 300 average revenue per user (ARPU) in five years. It expects the next tariff hike which is pending this year to drive the company's APRU to 200 mark. Airtel has announced its financial performance for the quarter and year ending March 2022.

During an investor call, Bharti Airtel India and South Asia MD and CEO Gopal Vittal said, "My own sense is that we should start seeing some tariff increases during the course of this year. I do believe that the tariffs at that level are still very low. The first port of call is to get to 200 which will require at least one round of tariff increase," reported PTI.

During Q4FY22, Airtel posted a consolidated net profit of 2,007.8 crore rising by a breath-taking 164.46% from 759.2 crore in the same quarter last year. Airtel surpassed analysts' estimates. Consolidated revenue from operations jumped by 22% to 31,500 crore in Q4FY22 compared to 25,747 crore in the corresponding period of last year. The growth was backed by strong and consistent performance delivery across the portfolio.

Airtel's ARPU rose to 178 in Q4FY22 compared with 145 in Q4 of last year and 163 in the preceding quarter.

Major telecom players have been increasing mobile calls and data prices for the last two years. As per the report, from November-December 2021 period, three private players Airtel, Reliance Jio, and Vodafone Idea raised mobile plan prices ranging by 18-25%.

As per Vittal, the company was able to gain 4G customers even as the shortage of electronic chips led to an increase in the prices of smartphones. The postpaid customer base crossed the 20 crore mark.

Further, Vittal mentioned that the chip shortage led to a rise in the price of entry-level smartphones from 7,000 to about 10,000 which impeded mobile phone upgradation.

According to Vittal, this is a temporary phenomenon and the reason is that people tend to get used to a new normal. He said, "I think the initial shock is likely to wear off in the next few months. That said there are obviously headwinds in terms of inflation in commodity prices, energy prices, and so on. All of that obviously takes a toll on consumers, and wallets. Let's see how this plays out."

Talking about Airtel's vision for the next five years, Vittal said, the company's non-mobility business should become large by that period including B2B business and broadband business.

He added, "ARPUs on mobility should be close to 300. In fact, it should be around that level in the next five years."

In Q4FY22, Airtel's mobile customer base in India climbed by only 1.5% to 32.6 crore from 32.1 crore in the same quarter a year ago.

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