Airtel tariff hike: Subsequent hike will help the company cross the Rs 200 ARPU mark, MD says

Telecom operator Bharti Airtel on Wednesday said it expects to reach the target of Rs 300 per user in five years while the next tariff hike, which remains unresolved this year, will help the company surpass Rs 200.

Gopal Vittal, MD and CEO of Bharti Airtel India and South Asia, said during an investor call that the company was also able to gain 4G subscribers due to rising smartphone prices due to shortage of electronic chips. The number of postpaid subscribers has crossed 200 million.

“My own idea is that we should start seeing some tariff increases this year. I believe tariffs at that level are still very low. The first port of call is at Rs 200 which will be the minimum required. One round of tariff hike,” Vittal said.

Airtel’s ARPTelecom players have been raising the price of mobile calls and data for the past two years. U, a key metric for all telcos, came in at Rs 178 for the quarter, which increased from Rs 145 in the March 2021 quarter to “healthy flow” through year-round tariff revisions and strong 4G subscribers. “

All the three private players increased the price of mobile plans by 18-25 per cent between November-December 2021.

Vittal says the price of entry-level smartphones has risen from Rs 7,000 to about Rs 10,000 due to the lack of chips, which has hampered mobile phone upgrades.

“I believe this is a temporary phenomenon and the reason is that people tend to get used to a new normal. I think the initial shock will stop in the next few months. And much more. All of this clearly affects consumers and wallets. Let’s see how it works, “says Vittal.

In India, Airtel’s mobile subscriber base grew by just 1.5 per cent year-on-year to 32.6 crore in March 2022 from 32.1 crore a year ago.

In response to a question about Airtel’s vision for the next five years, Vittal said the company’s non-mobility business should grow during this period, including B2B business and broadband business.

“ARPUs on mobility should be close to Rs 300. In fact, in the next five years it should be close to that level,” Vittal said.

The company has more than doubled its consolidated net profit for the March quarter to Rs 2,008 crore a year, boosted by average revenue growth per user and an exceptional profit.

The profit after tax for the January-March quarter was 2.5 times higher than the Rs 759 crore recorded a year ago.

Airtel’s revenue from operations increased by 22.3 per cent to Rs 31,500 crore in March 2022 from Rs 25,747 crore in the year-ago period.

FY22 For the full year, Sunil Mittal-led telco reported a net profit of Rs 4,255 crore, as against a loss of Rs 15,084 crore in the previous fiscal (FY21), marking a change in performance in a market where significant announcements have been made.

Bharti Airtel earned Rs 116,547 crore for FY22, up from Rs 100,616 crore recorded in the previous financial year. That translates to a 16 percent topline increase for the full year. The company has invested Rs 25,661.6 crore in 2021-22.

Vittal said Capex is expected to be in the same range as last year and there could be some increased costs for 5G services.

He declined to comment on the 5G auction after sector regulator TRAI recommended the price as “very disappointing”. The Telecom Regulatory Authority of India (TRAI) has planned a mega auction of over Rs 7.5 lakh crore at a base price across multiple bands for radiowaves allocated for more than 30 years.

Overall, the Telecom Regulatory Authority of India (TRAI) has recommended a reduction of about 39 per cent in reserve or floor price for spectrum sales for mobile services, including the latest 5G offer, as it matches revenue expectations with industry financing. Power

Watchdog has recommended a mega auction plan of over Rs 7.5 lakh crore for 1 lakh MHz spectrum if the government allocates it for 30 years.

In 20 years, the total value of the proposed spectrum auction will stand at a reserve price of around Rs 5.07 trillion, according to back-of-the-envelope calculations.

With a lot of spectrum unsold in the last two auctions, TRAI sells airwaves in all existing bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2300 MHz, 2300 MHz, 2300 MHz, 800 MHz, 900 MHz. Has recommended the government to do. 600 MHz, 3300-3670 MHz and 24.25-28.5 GHz.

The auction is expected to be held in late June or early July.

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