MC Exclusive: Tariffs are going up, need to be at Rs 300 ARPU level, says Sunil Mittal

How do you look at Starlink? They may soon get an approval.

Starlink is a formidable competitor. You can’t underestimate them, but everybody has a space in the market. Our primary focus is on B2B, and we are not in B2C at all. We focus on use cases like military, navy, army, oil and gas, enterprise, warehousing, industrial application, and cellular backhaul.

Do you believe satellite spectrum allocation should commence promptly?

They should start giving it now because everything is ready.

What’s your view of the market dynamics amid the current troubles faced by Vodafone Idea and BSNL? Do you expect any change?

India is a large country with 1.5 billion people. Including BSNL, 3+1 (Three private telcos and one PSU telco has been our position. Vodafone Idea is having a board meeting. Let’s see what they come up with. The country, I believe, can easily support this 3+1 player market. But, wherever it ends, it is fine. There are currently two strong operators. Can there be another strong operator? Let’s see.

Are you still open to strategic partnerships with Big tech companies and streaming companies?

There is no bad blood. We already have some partnerships with Google, Meta and Microsoft. We have a deep relationship with each of them… and have had multiple meetings with them at this year’s MWC. All we’re saying is guys, contribute towards the infrastructure building. We can’t be the only ones responsible.

Are you open to investments from big tech companies like Google?

Even if they invest in my equity or competition or the network… that’s a different matter. For equity, they’re going to make gains. Google investment came at Rs 700, and today that is Rs 1,100 plus… So, they made a ton of money on that. That is not a substitute for this. Fair Share is something else.

What about investments in general?

We don’t need an investor. We’re done. We don’t need any more.

Singtel wants to increase its stake in Airtel to match that of the Bharti group. When will that happen? 

Singtel has made an announcement that they would like to equalise with us, which we are fine with. Ultimately, Bharti Telecom is 40 percent. I would want that to be the only vehicle holding all the stake in Airtel between us and Singtel. Singtel has some stake outside. We have some stake outside…The idea is to eventually bring it there or make some sales in the market so you do equalise. It’s their need, not ours.

I have not checked with Singtel, but they can do it whenever they are ready.

In the telecom segment, why are tariffs still not going up?

We are going up, and our ARPU is the highest in the industry. But as I said at the Mobile World Congress seven years back, we need to be at the Rs 300 ARPU level. First pitstop was Rs 200. That’s taken five to six years. But it’s taken a long time, and the costs have gone up… inflation has been there. So, Rs 300 is probably relevant today or not. But at least let’s get there. We’ve already had a slight premium to the competition.

Do you want the Universal Service Obligation Fund (USOF) to be used to subsidise mobile services? 

The fund will always be the first fibre rollout in some rural areas. And we participate there actively. It’s more towards fibre laying by the government. For mobile services, we have said many times that it is something the government has to decide itself… We want 5 percent of the industry’s revenue to be spent in the right places. Maybe they could look at giving device subsidies. It should go towards supporting the digital ecosystem.

Are you concerned about the monetisation of the 5G network after spending aggressively on deployment?

Here at the event, there is so much happening… Use cases are now developing… it’s only a matter of time before you start to see some applications developing fairly soon. At this year’s Mobile World Congress, what is going on is mind-boggling; you can’t even absorb what is being shown here with AI capabilities. So let’s hope sooner than later, our networks will be ready. We are more or less rolled out by March and will complete our entire cycle. Whatever is left will be done next year. The 5G network is there and now, let people use it.

What are your views on the incentive schemes to build an electronics ecosystem, including semiconductor manufacturing?

So much traction has come through in the last three to four years. One could have never imagined that India would be considered a manufacturing destination. So what is helping is more than just these two or three percent subsidies. It says that the government’s focus on manufacturing is high now. This only helps. It is not that we get some subsidies, but approvals, land and electricity on priority. Everything is there.

What are you doing to generate new revenue streams for the group?

Airtel is becoming more and more a digital company than a telecom company. It has got a bank which is doing very well. Yes, of course, it owns a tower company which is 48 percent. Then there is Africa, and then at the personal level, there’s a satellite where we made an investment. Let’s see how that pans out.

But we have been selling and getting out of other businesses in the group, like insurance, food, and skilling, because they have not been scaled up. So, we want to focus on the areas where we scaled up.

Have you decided to increase your stake in Indus Towers?

We need to get a decision on the third operator (Vodafone Idea) because it is a very large tenant on the Indus towers. Unless that is clear, there is no point in making a move. Let’s see how that pans out. And then, if we see some stability, we may do that.

How is Airtel’s transition to a digital company progressing?

It’s not for the valuation that becomes a byproduct. It is to sell more products and services to our customers, especially enterprise customers, whether it’s cybersecurity solutions or security and CPaaS. That part is, to my mind, a job well done. And, of course, we don’t produce everything ourselves, like music. We have a platform video, and we have a platform or tie-up with Amazon Prime, Netflix, and Disney. Those partnerships are playing well on the content side, and digital products like CPaaS, which, you know, are IQ and Airtel’s digital suite of services, are all going to grow. There will be a multi-thousand crore revenue generation machine from digital products.

Which businesses of yours could become big on a standalone basis?

It is hard to do this navel-gazing, but ultimately, from the connectivity suite, which is the foundation and a very big business. Multiple other businesses are developing, especially in the area of enterprise. Enterprise, where we are at $3 billion today, has the potential to go to $10 billion. India is a large country. Everybody wants to find more solutions and connectivity, which includes the global business. DTH business is not going to scale to those heights that one thought. We are growing a little bit, but it’s a small business now. And then the bank and the digital area, that’s very exciting.

Have you decided on listing the payments bank?

At some point in time, we will do it. But not in the near term.

How do you assess the state of the Indian economy?

You can see the engagement and discussions with almost all senior leaders at the Mobile World Congress. Last night, we were at a large industry dinner with the king of Spain. India is the toast of the world. Everybody’s talking about Indian stability, political stability, political leadership, political leadership of a country, economic momentum, and FDI. India is in a good place. I genuinely say that India’s moment has come. And we need to see that all of us, it’s a collective effort of the nation...everybody on the street, everybody in some job, everybody in business and government, everybody needs to come together.

(The reporter is in Barcelona to cover the Mobile World Congress at the invitation of Xiaomi)