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Bharti Enterprises founder and chairman Sunil Bharti Mittal feels that the time has come now to start to rationalise and repair the tariffs in the Indian mobile industry. In an interview to Economic Times, Mittal said, “We have spent nearly Rs 80,000 crore on 5G spectrum and rollout. Our competition has spent more than Rs 100,000 crore and there are no additional revenues as you know. So, time has come now to start to rationalise and repair the tariffs.”
When asked if Airtel will take the first mover advantage and initiate another price hike. Mittal said, ” We have always been doing it. Whenever the next opportunity comes, we will not hesitate.”
India has the lowest ARPU in the world
Mittal said that India has one of the lowest ARPU in the world. “If you really look at it, the worldwide ARPUs are significantly higher. We are talking about India at $2.2 now. At Rs 300, it would probably mean $3.5, even in the Southeast Asian countries whether it is Philippines, Indonesia, Thailand which are at similar economic levels, the ARPUs are $12, $15, $16. So, we need to get to a much higher level eventually.”
“We are at Rs 208 (ARPU). Competition is between Rs 140 and Rs 180-190. So, it has improved. It has taken a much slower pace than I would have imagined, but I think we have come to a point where investments have now run ahead,” he said. Average Revenue Per User or ARPU is the metric that measures the earnings generated per user.
Time to get to Rs 300 ARPU
Talking of ARPU goals, he said, “So, Rs 300 is the number that we need now, but the industry should keep pace with the inflationary pressures that it has on the cost of rental for towers, fuel, employment costs, administrative costs, etc, etc. So, everything is becoming very expensive, but let us first get to the Rs 300 which has been a position that I espoused six-seven years back and we are still only two-third of the journey.”
On if worst is over for the telecom segment, and better days are ahead, Mittal said, “…I would say now is the time to ensure that the sector is healthy, vibrant and has enough return on capital that is deployed and keeps on rolling out India’s dream of being a leading country in the digital space.”
When asked if Airtel will take the first mover advantage and initiate another price hike. Mittal said, ” We have always been doing it. Whenever the next opportunity comes, we will not hesitate.”
India has the lowest ARPU in the world
Mittal said that India has one of the lowest ARPU in the world. “If you really look at it, the worldwide ARPUs are significantly higher. We are talking about India at $2.2 now. At Rs 300, it would probably mean $3.5, even in the Southeast Asian countries whether it is Philippines, Indonesia, Thailand which are at similar economic levels, the ARPUs are $12, $15, $16. So, we need to get to a much higher level eventually.”
“We are at Rs 208 (ARPU). Competition is between Rs 140 and Rs 180-190. So, it has improved. It has taken a much slower pace than I would have imagined, but I think we have come to a point where investments have now run ahead,” he said. Average Revenue Per User or ARPU is the metric that measures the earnings generated per user.
Time to get to Rs 300 ARPU
Talking of ARPU goals, he said, “So, Rs 300 is the number that we need now, but the industry should keep pace with the inflationary pressures that it has on the cost of rental for towers, fuel, employment costs, administrative costs, etc, etc. So, everything is becoming very expensive, but let us first get to the Rs 300 which has been a position that I espoused six-seven years back and we are still only two-third of the journey.”
On if worst is over for the telecom segment, and better days are ahead, Mittal said, “…I would say now is the time to ensure that the sector is healthy, vibrant and has enough return on capital that is deployed and keeps on rolling out India’s dream of being a leading country in the digital space.”
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