Cheap data days could soon be over; Sunil Mittal bats for a hike in tariffs to help telcos sustain

In Q1FY21, Airtel reported an Arpu of Rs 157, the highest in the industry.

Earning $2 for 16 GB of data is a “tragedy” and not sustainable, Bharti Airtel chairman Sunil Mittal asserted on Monday. Reiterating the need for mobile tariffs to rise, Mittal said Airtel expects its average revenue per user (Arpu) to cross the Rs 200-250 mark in the next five-six months.

In Q1FY21, Airtel reported an Arpu of Rs 157, the highest in the industry. Speaking on a leading television channel, Mittal observed that while telecom operators in India don’t want to earn $50-60 from a customer, as is the case in the US, Arpu nonetheless needs to rise to Rs 300 for the business to be sustainable.

Mittal called for a reset in the telecom space. Pointing out that the three operating telcos need to invest in 5G connectivity and roll out the network, the Airtel chief said the sector could be down to just two players in the future, given the financial stress. “Unless the third operator puts in fresh capital, the survival of the operator is in doubt,” Mittal observed.

The survival of Vodafone Idea has been in doubt ever since the Supreme Court asked telcos to pay AGR dues. While the government, on its part, has proposed a staggered tenure of 15-20 years to recover the AGR dues from the companies, the court has reserved its order.

Mittal also called on the government to be more courageous and less litigious. The telecom sector was one where lawyers can be seen everywhere, he said, asking that litigation be reduced. He lauded the government’s “vivad se vishwas” scheme as a good initiative.