Bharti Airtel is looking to raise mobile phone call and data rates across all plans in 2023, telecom firm’s Chairman Sunil Bharti Mittal said on Monday, February 27.
The company had in January 2023 increased the price of its minimum recharge or the entry-level for the 28-day mobile phone service plan by about 57 per cent to Rs 155 in eight circles.
Responding to a PTI query on the need for a tariff hike when the company’s balance sheet is healthy, he said the return on capital in the telecom business is very low and a tariff hike is expected in 2023.
“It (tariff hike) will happen across the board,” Mittal said at Mobile World Congress (MWC) on Monday.
He said the company has injected a lot of capital that has made the balance sheet strong but the return on capital in the industry is very low.
“That needs to change. We are talking of small increments that need to come in the Indian tariff situation. I hope it happens this year,” Mittal said.
Asked about the impact of price increase on people at the bottom of the pyramid, he said the hike is low compared to the spending people are making on other things.
“Salaries have gone up, rents have gone up except for one thing. There is no one complaining. People are consuming 30 GB for almost nothing. We don’t have more Vodafone (Idea) type of scenarios in the country.
“We need a robust telecom company in the country. The dream of India is digital, economic growth is fully realised. I think the government is fully conscious, the regulator is conscious and people are also very conscious,” Mittal said.
The company stopped its minimum recharge plan of Rs 99, under which it offered 200 MB of data and calls at the rate of Rs 2.5 paise per second.
While the short-term ARPU target of Airtel is Rs 200, it focuses on a medium to long-term ARPU target of Rs 300 through price hikes for sustainable operations.
Mittal said India’s focus on economy and infrastructure is paying rich dividends to the companies. Talking about the impact of inflation and global macroeconomic situation on the company, Mittal said India is moving very fast.
“Economically, all sectors of the Indian economy are at the moment getting a lot of attention from the government, from investors. FDI is really coming in a very big way. Inflation is being reasonably checked now. I think India’s entire focus on this economy and infrastructure is paying rich dividends,” he said.
Mittal said focus on digital infrastructure in particular is really getting a lot of benefits to India.
“Companies that are operating in this environment, obviously, have to gain a lot and consumption of digital medium is high. We keep on talking about some more improvement in tariffs and ARPU (average revenue per user) that’s the only focus remaining,” he said.
Mittal said the government has done a lot to make telecom industry infrastructure healthy with support to BSNL and Vodafone Idea.
“We have always said that for a country the size of India there should be three operators. The question is, a third is going to be now BSNL, stronger one, or Vodafone (Idea) have a place to play as well. Government has done its best now. It is for Vodafone to now take advantage of it,” Mittal said.
The government recently converted interest dues of Rs 16,133 crore related to deferment of spectrum auction instalments and adjusted gross revenue payments into 33.44 per cent stake in the Vodafone Idea (VIL) which is reeling under a burden of over Rs 2.2 lakh crore.
Asked about monetisation of 5G network, he said that the company’s focus is entirely on rollout of the network and monetisation will happen after the network base is ready.
The company now has only about 100 million 2G customers left but Mittal said the company will not shutdown 2G services until the customer base migrates to 4G or 5G.
“We are now coming below 100 million–one of the smallest pool of 2G customers. But we can’t leave them stranded. I would love to switch off the network and save all the investments that go in 2G but there are a large amount of customers who need to upgrade to 4G- 5G phones but for that device prices are currently prohibitive,” Mittal said.
Mittal, who is executive chairman of satellite company OneWeb, said the firm will be ready to provide services in India by July-August. He categorically denied a report on his plans to buy a stake in Paytm.
“They mentioned my name (in the report) and I can confirm to you that this is not in play. We are not looking at it. Our payments bank is moving well. It has become profitable. We have over 65 million customers on the bank. They are frugal customers in rural areas. It is doing a fantastic job in financial inclusion,” Mittal said.