Telecom giant Bharti Airtel (Airtel) emphasized the necessity for tariff adjustments due to the persistently low tariff levels in India compared to global standards. Since the advent of 4G services by Reliance Jio in 2016, Airtel, led by Sunil Mittal, has consistently raised concerns about low tariffs in the Indian telecom sector and advocated for an increase in the average revenue per user (ARPU) to at least 300.
Airtel’s ARPU demonstrated an eight percent growth, reaching 209 in the fourth quarter ending March 31, compared to 193 in the corresponding period of the previous year. Sequentially, the ARPU, a pivotal metric for telecom operators, saw a marginal increase from 208 in the December quarter.
Gopal Vittal, MD of Airtel, underscored the critical importance of tariff adjustments during the fourth-quarter earnings call, stating, “The industry’s recovery hinges on tariff adjustments; our pricing levels are unreasonably low relative to global standards. Thus, tariff adjustments are imperative for enhancing return ratios, irrespective of the technology employed.”
The telecom industry has witnessed two rounds of tariff hikes in recent years, leading to market consolidation each time. Vittal acknowledged the essential nature of mobile services in people’s lives and their ability to adapt to tariff increases.
Vittal also highlighted Airtel’s efforts to raise entry-level tariffs for feature phones and employ various strategies to upgrade tariffs through digital analytics. However, he emphasized the need for industry-wide tariff adjustments, expressing concern that unilateral action by Airtel could pose challenges if competitors do not follow suit.
Regarding rival Vodafone Idea’s substantial fundraising, Vittal expressed optimism, stating that India would benefit from having three private operators. Airtel reported a 31 percent year-on-year decline in its Q4 consolidated net profit, amounting to ₹2,072 crore. However, its consolidated revenue experienced a four percent year-on-year increase, reaching ₹37,599 crore.
