Bharti Airtel’s Sunil Mittal wants mobile tariff hiked to ₹10-12/day or ₹350 per month; here’s why
Bharti Airtel founder and chairman Sunil Mittal wants mobile tariffs in India hiked to ₹350 per month amid rising costs, arguing that entry plans would work out to ₹10-12 per day for users, according to a PTI report.
In an interview with PTI for the Bharti Enterprises' 50th year, Mittal made the case for increased mobile tariffs, stating that current packs are priced too low compared to rising costs for companies and backlog in infrastructure.
Mittal argued that cost of running a network and how much telecom infrastructure remains to be built are key considerations but did not however give specific timelines for the increase.
“I used to say earlier, the right level is ₹300 (monthly revenue per user), but that was 10 years back. There's some inflation that we all suffer. Oil prices are up, electricity costs are up, employee costs are up, administrative costs are up. Everything is up,” he said.
He added that India has around 3.5 lakh mobile towers, while China has more than 10 lakh towers. “So, we have a job to do. We have to at least double from where we are today. More fibre and more submarine cables are needed, and all this will require very serious investments,” he said.
He also sought to link the usage of telecom with other essential services including UPI, health records, direct benefit transfers and delivery and e-commerce firms, who all run on their networks. He also pointed to the money sunk into 5G, which has not yielded revenues as expected.
Mittal further argued that telecom is undervalued compared to the platforms that depend on it. “We do all the hard work, but we don't get the same valuation and the profitability that those who don't make these investments get,” he said.
According to the report, Mittal feels that ₹350 per month on average would keep India's tariffs “by far the cheapest anywhere in the world”, describing it offered in a number of options with entry plans at "200 plus" and higher packs of ₹5, 7, 8 or 10 hundred. He said this works out to ₹10-12 a day.
“You buy now soap and a packet of chips. You know what it costs. Having a bottle of Pepsi costs you a lot more than that ( ₹10-12/day),” he said. Mittal argued that you are not only paying for telecom use, but also banking, education, benefit transfers, UPI payments and health records, “and by the way, enjoy your movies and Instagram and YouTube.”
From a business perspective, the report cited company results to note that Airtel's mobile revenue per user was ₹271 in the September quarter, against ₹256 a year earlier. So, ₹350 mobile revenue per user would be a rise of around 29%.
Airtel in August discontinued some entry-level plans without raising tariffs, also in November it brought back a ₹299 prepaid plan after net customer additions fell to 7.16 lakh in the September quarter from 33 lakh in the previous one, the report added.
(With inputs from PTI)
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