Airtel for affordable tariffs in Africa, could spark price war

A day after closing the deal for acquisition of Zain Telecom's Africa assets for $10.7 billion, Bharti Airtel today said it would introduce the concept of 'affordable tariffs', a move that may initiate a price war in the continent.

"We will not go for tariff cut. We will go for a long-term affordability strategy which is good for the customer and for the company," Bharti Airtel CEO and In-Charge for International Operations Manoj Kohli told PTI.

"The monthly usage is 60-70 minutes per customer in Africa against 450-500 minutes in India. There is a pent-up demand. Tariffs are high in Africa. Our objective is not to introduce low tariffs in Africa... Our objective is affordability. We will see what is the level of affordability normal customer wants," he said.

Cheaper call rates and multiple tariff plans have pushed up India's mobile subscriber base, where a minimum of 13-15 million users are added every month.

He said Airtel will introduce more tariff plans suiting the customer profile and pay capability in each of the 15 African countries.

The average revenue per user is $7 in Africa and the average tariff is more than 10 times that of India. In India, the lowest call charges touch 10-15 cents.

He said Airtel will invest $800-1,000 million this fiscal in Africa for network roll out and services, though this figure is yet to be finalised. He said the company can extract more utilisation for this capex as it will get an Indian business model and Indian rates of capex.

Kohli, who will shift to Nairobi this week to head Bharti Airtel's Africa business, said the company will finalise vendors for the African operations in the next two months.

"We have already invited all our present partners -- Nokia, Ericsson, Alacatel, IBM and Wipro. There are some new partners also we are talking to, like Huawei and HP. In the next two months, we will take the final decision about the partners," he said.