Tuesday, February 28, 2023

Very low return on capital; tariff increase anticipated by mid-2023: Chairman of Bharti Airtel

Return on capital very low, expects tariff hike by mid of 2023: Bharti Airtel chairman


BARCELONA: According to Sunil Bharti Mittal, chairman of Bharti Airtel, a tariff increase is likely to occur in the middle of this year in the telecom industry, where the return on capital is extremely low.

At the Mobile World Congress, in response to a question from PTI, Mittal stated that the business does not require additional capital because it has a sound balance sheet.

"A lot of capital has been injected, which has strengthened the balance sheet, but this industry has a very low return on capital." This must change. In relation to the Indian tariff situation, we are talking about incremental steps that must be taken. Mittal stated, "I hope half by the middle of this year."

When asked about the impact on those at the bottom of the pyramid, he stated that the increase is modest in comparison to other expenditures.

"With the exception of one thing, rents and salaries have increased. Nobody has any complaints. For almost no cost, people are using 30 GB. There aren't many Vodafone-type situations in the country.

"In the country, we require a robust telecom provider. Digitalization is India's dream, and economic expansion is complete. "I think the government, the regulator, and the people are all very conscious," Mittal stated.

He stated that he disagrees with the claim that those at the bottom of the economic pyramid are impacted by the tariff increase.

Bharti Airtel, led by Sunil Bharti Mittal, increased the minimum recharge price for its 28-day mobile phone service plan by approximately 57% last month, reaching Rs 155 in eight circles.

The minimum recharge plan, which offered 200 MB of data and calls at a rate of Rs 2.5 paise per second, was discontinued by the company. The minimum recharge plan cost Rs 99.

Bharti Airtel's India Mobile Average Revenue Per User (ARPU) soared from Rs 163 in the December 2021 quarter to Rs 193 in the December 2022-23 quarter thanks to price increases last year.

Airtel focuses on achieving a medium- to long-term ARPU target of Rs 300 through price increases in order to maintain sustainable operations, despite its short-term ARPU target of Rs 200.

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