Tariff hike to depend on largest telco: Bharti Airtel chairman Sunil Mittal

Bharti Airtel chairman Sunil Mittal believes that India will be an important player in state-of-the-art 5G technology, but pricing wants to be investor friendly. In conversation with Business standard, Mittal spoke about increasing mobile tariffs, industry interest in the upcoming 4G spectrum auction, the company’s stance on 5G and the urgent need for the government to take steps to curb Chinese equipment vendors in telecommunications.

Asked about Airtel’s plan to increase tariffs, Mittal said: “It will depend on the biggest player”. Currently, Reliance Jio, with over 400 million mobile subscribers, is the country’s largest telco, having beaten Airtel, the market leader for a long time. According to the latest data from Telecom Regulatory Authority of India (TRAI), Jio’s wireless market share is more than 35 percent as compared to 28 percent by Airtel.

Citing industry rivals as well as TRAI, Mittal said the current low tariffs in the area were not sustainable, but Mittal said that “one has to make calls based on market conditions”. However, he also said that the industry was not seeing a large tariff hike at once.

There are indications that Airtel may not take the first step in the rate hike, although it was Mittal who pledged to raise the issue earlier in the year. Mittal said in August that it was a tragedy that 16GB of data was coming to India at Rs 160 per month, while arguing that it was time to raise tariffs in an industry that is financially stressed.

Ravinder Takkar, managing director of Vodafone Idea, said in an earnings call after last month that the company would not back down from taking the first step in increasing tariffs.

According to Tucker, there are strong signs that the competition will follow suit.

Despite tensions in the region, excessive competition kept the Talcos from raising tariffs. For Airtel, it wants the average revenue per user (ARPU) to increase to Rs 200 a month and later to Rs 300. Airtel’s mobile ARPU is pegged at Rs 162 per month for the September quarter and there may be only one tariff increase The company is close to its target in an industry that last raised rates in 2019.

On Airtel’s approach to 5G, Mittal told this newspaper that there is no doubt that India will be a major player once technology is rolled out. “I estimate that it will take a few years for 5G to come to India in a meaningful way.”

But Mittal expressed concern over the “unreasonably high” 5G reserve price recommended by the regulator. Not only has the industry been opposed to the Rs 492 crore per megahertz reserve price for 5G spectrum, even a task force set up by the Finance Ministry in May to rationalize prices to make next generation services affordable for all Was suggested to make.

“5G spectrum pricing should be in such a way that it encourages investment in telecommunications networks,” Mittal said. “Price at the current level will not serve anyone’s purpose.” In fact, the task force had argued that the 5G reserve price in India was much higher than in other countries – something that the regulator has contested.

During the 4G auctions for the January to March quarter, Mittal said that Airtel will participate in a limited manner, so as to fill gaps in its network. While Jio is seen as a booming 4G auction, Vodafone Idea is expected to stay away from most.

In a recent analyst call, Airtel managing director and CEO Gopal Vittal had said that the company had some need to fulfill the spectrum footprint in the sub-GHz band, which has benefits in indoor areas and deep rural locations. It may need to add some “capacity spectrum”.

Responding to the central government considering the ban on Chinese equipment vendors in telecommunications services, Mittal said: “We will comply with any decision taken by the government on this matter.” He said that Airtel has the lowest risk with Chinese vendors as compared to some rivals. “It won’t be a huge issue for us,” he said.

The total debt of the top three telecoms of Jio, Airtel, and Vodafone Idea-was equal to Rs 3.9 trillion in the previous year. In addition, the industry faced dues related to adjusted gross revenue of 1.47 trillion.

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