Bharti Airtel on Wednesday said it expected its average revenue per user (Arpu) to reach Rs 200 this year itself. Gopal Vittal – MD and CEO, India and South Asia, told analysts that though tariffs won’t be hiked in the next three-four months, he expects further hikes during the year, and the company would not hesitate to take the lead when the time comes.
“From my perspective, I do expect a tariff hike sometime in 2022, but don’t think it’s going to happen in the next three-four months simply because of the SIM consolidation and growth needs to come back,” Vittal said. “Of course, it (tariff) ought to be determined by the competitive dynamics and by what happens to the other players, but we would not hesitate to lead it as we have done in the recent past,” he added.
On Tuesday, Bharti Airtel reported a monthly Arpu of Rs 163 during the October-December quarter, which was a 5.9% jump over the preceding quarter. This growth in Arpu was on the back of a series of tariff hikes the company has taken in the past few months.
The company had increased tariffs on certain post paid plans across retail and enterprise segments during Q2FY22 and in November 2021, increased the prepaid tariffs across all price points by 20%-25%, including unlimited plans as well as combo vouchers.
The increase in tariffs leads to decline in subscribers because of SIM consolidation — users junk additional connections because it becomes expensive. As a result at the end of the December quarter, Bharti’s total mobile subscribers declined marginally to 323 million. However, its 4G subscribers increased by 1.6% sequentially to 195 million — 4G users now comprise 62.8% of its overall user base — and since 4G users are high payers the Apru increased.
“We were almost flat in terms of subscriber additions and in relative terms, we have come out quite well. January was a very cold month and the pass through of SIM consolidation continued but I expect this would be fully moderated as we go through February and March and hopefully see business back to usual towards the end of coming quarter and certainly in Q1,” Vittal said.
Regarding the upcoming 5G auction, Vittal said the industry expects a reduction in reserve prices because the earlier price was unaffordable. Lauding the telecom reforms as game changing, Vittal said more needs to be done and the industry looks forward to the next round of measures planned by the government. “In particular, the high levies on the industry need rationalisation. Equally, the reserve prices for 5G spectrum must be lowered so that it is viable for us to purchase spectrum,” he added.
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