Market condition

A price increase is necessary because the prices are “unsustainable”, the market condition to guide the decision: Sunil Mittal of Bharti Airtel

A rise in telecommunications tariffs is necessary because current tariffs are “unsustainable” and market conditions will be observed before a call is taken, said telecommunications czar and chairman of Bharti Airtel Sunil Mittal.

On whether or not Chinese telecom equipment suppliers will be allowed to participate in next-generation 5G networks, Mittal said the larger issue is the nation’s decision and asserted that “what the country decides will be accepted by everyone “.

Regarding tariffs, the company has already taken a clear stance on the matter, he said, adding that Airtel strongly believes that tariffs need to increase.

“… the current tariffs are not sustainable, but Airtel cannot move without the industry or the regulator moving,” Mittal told PTI in an interview.

The industry needs a price hike at some point, he said, adding that “we’ll have to see the market conditions to do it.”

Mittal was responding to a question about the timing of what appears to be an impending industry-wide tariff hike in the Indian market and whether Airtel is going to initiate it or wait for its competitors to take their first step.

It is relevant to mention that in August of this year, Mittal described the data consumption of 16 GB per month for Rs 160 as a tragedy. The company maintained that the average revenue per user (ARPU) should reach Rs 200 and possibly Rs 300 for a sustainable business model. Bharti Airtel’s mobile ARPU stood at Rs 162 for the September quarter, compared to Rs 128 in the second quarter of FY20 and Rs 157 in the previous quarter in June.

The Bharti group supremo – which has repeatedly drawn attention to the high taxes and levies in the sector – further said that telecommunications being a “capital intensive industry” requires constant investment in networks, the spectrum, towers and technology. was therefore important for the industry to be “sustainable”.

“This industry needs tons of money, it’s a capital intensive industry … which buys spectrum, installs networks, fiber, radio, towers … it’s a industry that invests all the time, ”Mittal said.

Unlike the establishment of steel or electricity plants, or refineries, the telecommunications sector needs a continuous and recurring injection of capital.

“You have to spend billions of dollars again every year to get new technology, more coverage, more capacity… so this industry has to be sustainable. The government wants India to be digital India and people to be connected. I think we will have to leave it in their safe hands, ”he said.

As it stands, the telecommunications policy and the new digital communications policy state that maximizing revenue is not the goal, he added.

On the issue of Adjusted Gross Income (AGR) and the recent difference of opinion that has arisen between the telecommunications department and the company on the due date of the next installment of payment, Mittal pointed out that Airtel had already paid Rs 18,000 crore, “significantly more than anyone else”.

“We paid Rs 18,000 crore … whatever they decide … we paid a lot more than anyone … so we’ll see, when the final decision is made,” he said.

Mittal said prices for 5G spectrum are “unaffordable” but, in the same breath, added that India has enough time for its 5G roadmap.

“Prices for 5G spectrum are currently unaffordable and India has time. No one in the world is far from 5G … even countries in Europe … UK, US … 5G coverage is still very sparse. So all is well, India is not late, ”he said.

When asked when he expects full-fledged 5G deployments in India, Mittal said, “The point is, when you need them… connected cars, robotic surgeries, that’s what they need. So, do we really have this on fire, right now? I do not think so. Asked if 2G will continue to exist in India even with the advent of a new generation of technology, Mittal said Airtel has already disabled the entire 3G layer and will continue to move 2G customers to 4G. .

“As soon as we can, we will continue to move our 2G customers to 4G, this process is underway. It’s the process, it keeps happening in an evolutionary, organic way, just every month, ”Mittal added. As to whether Chinese telecom equipment companies will be allowed to participate in 5G, Mittal said, “It’s not about being allowed or not being allowed. It’s a matter of the country’s decision … whatever the country decides, will be accepted by everyone ”.