Airtel CEO says tariff hike must as current charges unsustainable
2 min read . Updated: 28 Oct 2020, 03:20 PM IST
Premium- Vittal, who was addressing analysts at a post-earnings conference call, did not give a timeline on the tariff hike but expressed confidence over price rise in the future
NEW DELHI: Prices of data and voice services need to be increased as the current levels of tariff are unsustainable for the industry, Bharti Airtel Ltd chief executive Gopal Vittal said on Wednesday.
Vittal, who was addressing analysts at a post-earnings conference call, did not give a timeline on the tariff hike but expressed confidence about a price rise in the future. He said the telco aims to achieve an average revenue per user (Arpu) of ₹200 and ₹300 eventually.
“We are at a premium (in terms of tariff hike). 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 tariff hike.
Vittal said the telecom operator will continue to focus on serving quality 4G customers, a trend seen in the September quarter as well. During the quarter, Airtel recorded a sequential growth of 14.4 million in 4G user base at 152.7 million, up 48% from a year ago.
The telco now has 440 million users in 16 countries. Airtel’s Arpu rose to ₹162 during July-September from ₹128 a year ago, and ₹157 in the June quarter.
Vittal said Airtel is studying the low-cost smartphone space, adding that 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 July, rival Reliance Jio Infocomm Ltd, owned by Mukesh Ambani, had announced launching an entry-level low-cost smartphone in partnership with Google Inc. Jio, which provides only 4G services, is now the largest telecom operator by market share.
In the conference call, Vital 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% year-on-year jump in data consumption at Bharti Airtel in the September quarter, helping India’s second-largest telco post record consolidated revenues, which offset the telco’s net loss during the quarter.
The company clocked its highest consolidated quarterly revenue of ₹25,785 crore during the three months ended September, up 22% from a year ago. It, however, posted a consolidated net loss of ₹763 crore due to higher expenses and net finance cost.
It posted a consolidated net loss of ₹23,045 crore in Q2 of FY20. A Bloomberg poll of 10 analysts had estimated a profit of ₹121.60 crore for the September quarter.
