Airtel bats for hike in voice, data rates

Voice and data tariffs need to go up as current rates are unsustainable, Bharti Airtel Ltd chief executive Gopal Vittal said. Addressing analysts at a post-earnings conference call on Wednesday, Vittal did not give a timeline for a tariff hike, but expressed confidence about higher prices in future.

Vittal said the telco aims to achieve an average revenue per user (Arpu) of ₹200 and ₹300 eventually. Airtel’s Arpu rose to ₹162 in the September quarter, from ₹128 a year ago, and ₹157 in the June quarter.

“We are at a premium (in tariff rates, compared with rivals). In the telecom space, you can have a premium, but it becomes unsustainable after a point. We do not want to slow down our growth,” Vittal said when asked about why Airtel does not want to take the lead in a tariff hike.

Vittal said Airtel will continue to focus on serving quality 4G customers, a trend seen in the September quarter as well. During the quarter, the telco recorded a sequential growth in 4G users of 14.4 million to 152.7 million, up 48% from a year ago.

Airtel now has 440 million users in 16 countries. Vittal said the company is studying the low-cost smartphone space, adding the telco is yet to decide on an approach and is focusing on migrating its 2G/3G customers to 4G network.

“When it comes to low-cost smartphones, we have seen one of our competitors try to develop a lost-cost smartphone. We are studying the space,” Vittal said.

In August, Bharti Airtel chairman Sunil Mittal, too, had pitched for higher tariffs, calling the current rates unsustainable. Airtel’s Arpu, he said, is expected to cross ₹200 in six months due to higher digital content consumption. Airtel last raised tariffs in December last year.

In July, rival Reliance Jio Infocomm Ltd, owned by Mukesh Ambani, said it will launch an entry-level, low-cost smartphone in partnership with Google. Jio, which provides only 4G services, is now India’s largest telecom operator by market share.

Vittal said the rollout of 5G technology will take a few more years as India has an underdeveloped ecosystem. He said the reserve prices for spectrum enabling 5G services are unaffordable, and act a deterrent for 5G implementation.

A boom in remote work propelled a 58% jump in data consumption at Airtel in the September quarter, helping India’s second-largest telco post record revenue. It clocked its highest consolidated quarterly revenue of ₹25,785 crore during the three months to September, up 22% from a year ago. It, however, posted a loss of ₹763 crore due to higher expenses and finance costs.

The company reported a loss of ₹23,045 crore in the year-earlier period. A Bloomberg survey of 10 analysts had estimated a profit of ₹121.60 crore for the September quarter.