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regular-article-logo Monday, 07 October 2024

Bharti Airtel seeks significant increase in tariffs, citing 'absurdly low' rates

Gopal Vittal emphasised 'tariff repair' as key to improving the financial health of the industry

Our Special Correspondent New Delhi Published 16.05.24, 10:34 AM
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Bharti Airtel, India’s second-largest telecom operator, sought a significant increase in tariffs on Wednesday, citing “absurdly low” rates as a major hurdle to industry growth.

Gopal Vittal, managing director of Airtel, said low tariffs were hampering telecom companies to invest in infrastructure and deliver adequate returns to investors.

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He emphasised “tariff repair” as the key to improving the financial health of the industry.

“The return that the industry needs is predicated on tariff repair, this is the heart of the problem that we have today,” Vittal said. “Our pricing and tariffs are at an absurdly low level relative to any other part of the world,” Vittal said at a conference call with analysts.

The consolidated revenue from operations of the Sunil Mittal-led telco increased 4.4 per cent to 37,599.1 crore in the fourth quarter from 36,009 crore a year earlier.

Bharti Airtel’s average revenue per user (ARPU) — a key matrix for telecom operators — grew 8 per cent to 209 from 193 a year ago.

On a sequential basis, the APRU was marginally higher than 208 in the December quarter. Airtel told investors in the concall that tariff repair needs to happen across the industry.

The ARPU level for the company is over 200, while the right level should be 300, though it will still be the lowest in the world, it said.

Analysts said telcos may discontinue some existing base plans and introduce new and re-bundled products.

By cutting down bottom plans of 40-50 earlier, telecos were able to push up their ARPUs between 120 and 200 on average.

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