Sunil Bharti Mittal, Chairman of Indian telecom major Bharti Airtel feels that the return on capital in the business is “very low” and that we are likely to see a tariff hike mid-2023. He was speaking to reporters at the Mobile World Congress.
Mittal told PTI that Airtel has a healthy balance sheet with no need to raise any more capital. “Lot of capital has been injected that has made the balance sheet strong, but the return on capital of this 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 half (by mid) of this year,” he added.
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When asked about impact of tariff increase on people at the bottom of the pyramid, Sunil Mittal said the hike would be low compared to people’s spend on other things and disagreed that they are impacted. He added, “Salaries have gone up, rents have gone except one thing. There is no one complaining. People are consuming 30 GB for almost paying nothing. We don't have more Vodafone type of scenarios in the country. We need a robust telecom company in the country. The dream of India’s digital, economic growth is fully realised. I think the government is fully conscious, the regulator is conscious and people are also very conscious.”
In January, Airtel hiked its 28-day minimum recharge plan by 57 percent to Rs 155, in eight circles. It also scrapped its Rs 99 minimum plan, which offered 200 MB data and calls at Rs 2.5 paise/second.
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Notably, Airtel’s India Mobile Average Revenue per User (ARPU) last year soared to Rs 193 during the December quarter of FY22-23, compared to Rs 163 in the same quarter in FY21-22, largely due to price hikes. The telco’s short term ARPU target Rs 200, and medium to long term ARPU target is Rs 300, planned through price hikes for sustainable operations.
(With PTI inputs)