Sunil Mittal hints at mobile services price hike, low rates not sustainable

Bharti Airtel chairman Sunil Bharti Mittal on Monday hinted at an increase in mobile services prices in the next six months, saying that data at low rates is not sustainable for the telecom industry.

He said that 16 GB data consumption a month for Rs 160 is a tragedy.

"You either consume 1.6 GB of capacity per month either at this price point or you may prepare to pay a lot more. We are not wanting USD 50-60 like the US or Europe but certainly USD 2 for 16 GB a month is not sustainable," Mittal said at an event.

Mittal also said that the average revenue per user (ARPU) is expected to cross Rs 200 in six months on digital content consumption. ARPU is the measure of revenue generated per user for a telco.

"We need a Rs 300 ARPU in which you will still have lower end at Rs 100 a month with decent amount of data. But if your consumption is largely around watching TV, movies, entertainment and depriving other vital special services networks, then you need to pay for that," Mittal said at the launch of a book written by Bharti Enterprises executive Akhil Gupta.

Airtel reported an increase in the ARPU to Rs 157 in the first quarter ended June 30, 2020. The rise in ARPU came after the tariff hike by Bharti Airtel in December 2019.

Mittal said that while telecom operators have served the nation during the difficult times, the industry needs to invest in 5G, more optical fibres, submarine cables etc.

"Businesses which are not in telecom, also need to adopt digital. You should see solid ARPUs building up in the next 5-6 months for the industry to be sustainable. We are down to 2-3 players now. India is a very price conscious market. In six months time we should be crossing the mark of Rs 200 for sure and Rs 250 would be ideal," Mittal said.