On Thursday, Bharti Airtel again restated that the company is in need of increasing the tariffs as the current prices are not sustainable for the company. However, the company didn’t disclose any specific date of implementation.
Bharti Airtel highlighted its main concern by saying that for the long term survival, the average revenue per user (ARPU) needs to stand at Rs. 300 every month from the current ARPU of Rs. 157 a month.
Airtel MD and CEO Gopal Vittal said, the company always tried to maintain the ARPU between Rs. 200 – Rs. 300 as the current prices stand unsustainable for the company.
“The organic increase in Arpu is modest and is only a function of 2G to 4G upgrade and some post-paid subscribers. At some stage, price correction must take place,” he further added.
Vittal explained the situation by saying that at current ARPUS, a large amount of data allowance is given to the customers, leading to higher consumption of data during the quarter as against the lower addition of the customers in the company. During the quarter, Bharti Airtel added only 2 million 4G customers to its system. An increase in the consumption of data by existing users is not increasing any additional revenue for the company. So, a hike in the tariffs is the need of the hour.
When asked about the peer company, Reliance Jio, and its revenue collection from its digital platforms, Vittal avoided commenting on it but ensured that Airtel’s digital platforms will be elevated up in order to open new revenue sources.
However, Bharti Airtel tries to build most of its products in a partnership model as compared to its peer Jio, which has more in-house built products such as Jiomeet.
Vittal also said that the 5G spectrum in the Indian market is still in its budding state and it will take some good time to take commercial benefits out of it.
Talking about the impact of the coronavirus outbreak on the economy, Vittal said due to the disruption in the supply chain, there has been a fewer number of 4G additions but the numbers are improving as the unlocking process starts in the country.