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Airtel Set to Raise Charges Across Board

Airtel Set to Raise Charges Across Board

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NEW DELHI, Feb 28: Bharti Airtel is looking to raise mobile phone call and data rates across all plans this year, telecom firm’s Chairman Sunil Bharti Mittal said. The company last month increased the price of its minimum recharge or the entry-level for the 28-day mobile phone service plan by about 57 per cent to ₹ 155 in eight circles.

“It (tariff hike) will happen across the board,” Mittal said at Mobile World Congress (MWC) in Barcelona. Responding to questions on the need for a tariff hike when the company’s balance sheet is healthy, he said the return on capital in the telecom business was very low and a tariff hike was expected this year.

He said the company has injected a lot of capital that has made the balance sheet strong but the return on capital in the 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 it happens this year,” Mittal said.

Asked about the impact of price increase on people at the bottom of the pyramid, he said the hike is low compared to the spending people are making on other things. “Salaries have gone up, rents have gone up except one thing. There is no one complaining. People are consuming 30 GB for almost paying nothing.

“We need a robust telecom company in the country. The dream of India is digital, economic growth is fully realised. I think the government is fully conscious, the regulator is conscious and people are also very conscious,” Mittal said.

The company stopped its minimum recharge plan of ₹ 99, under which it offered 200 MB of data and calls at the rate of ₹ 2.5 paise per second. While the short-term ARPU (Average Revenue Per User) target of Airtel is ₹ 200, it focuses on a medium to long-term ARPU target of ₹ 300 through price hikes for sustainable operations.

Mittal said India’s focus on economy and infrastructure was paying rich dividends to the companies. Talking about the impact of inflation and global macroeconomic situation on the company, Mittal said India was moving very fast.

“Economically, all sectors of the Indian economy are at the moment getting a lot of attention from the government, from investors. FDI is really coming in a very big way. Inflation is being reasonably checked now. I think India’s entire focus on this economy and infrastructure is paying rich dividends,” he said.

Mittal said focus on digital infrastructure in particular is really getting a lot of benefits to India. “Companies that are operating in this environment, obviously, have to gain a lot and consumption of digital medium is high. We keep on talking about some more improvement in tariffs and ARPU that’s the only focus remaining,” he said.

Mittal said the government has done a lot to make telecom industry infrastructure healthy with support to BSNL and Vodafone Idea. “We have always said that for a country the size of India there should be three operators. The question is, a third is going to be now BSNL, stronger one, or Vodafone (Idea) have a place to play as well. Government has done its best now. It is for Vodafone to now take advantage of it,” Mittal said.

The government recently converted interest dues of ₹ 16,133 crore related to deferment of spectrum auction instalments and adjusted gross revenue payments into 33.44 per cent stake in the Vodafone Idea (VIL) which is reeling under a burden of over ₹ 2.2 lakh crore.

(Manas Dasgupta)

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