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Telecom tariffs have to rise, ARPU should be Rs 200: MD, Bharti Airtel

The last time the company revised its tariffs was in December 2019

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Bharti Airtel | telecom tariffs

Megha Manchanda  |  New Delhi 

bharti airtel
Gopal Vittal, managing director and chief executive officer (India and South Asia), stopped short of mentioning whether the company was contemplating a hike in rate in the near future

on Thursday said that have to increase as the average revenue per user (ARPU) should be around Rs 200, up from the current Rs 157.

Gopal Vittal, managing director and chief executive officer (India and South Asia), stopped short of mentioning whether the company was contemplating a hike in rate in the near future. Airtel’s ARPU rose to Rs 157 a month in Q1FY21 from Rs 129 in Q1FY20. The rise in ARPU is more organic as some of the company’s 2G customers migrated to 4G, he said in the company’s post-earnings conference call.

The last time the company revised its tariffs was in December 2019. Besides Airtel, Vodafone Idea, and Reliance Jio also raised their tariffs by 30 per cent around that time.

According to Vittal, Q1 was challenging. “Due to the nationwide lockdown, supply chains were disrupted, leading to a sharp drop in smartphone shipments and impacting the pace of 2G to 4G upgrade. Further, many of our offline channel partners were closed, including our own retail stores, restricting people’s ability to recharge conveniently. Our pace of network deployment also slowed down.

ALSO READ: Jio delivers strong Q1 performance on subscriber addition, ARPU growth

However, buoyed by higher data usage thanks to people working from home during the lockdown, consolidated revenues rose 15.4 per cent to Rs 23,939 crore.

reported an over 2x jump in profit before tax (PBT) of Rs 372 crore for the quarter ended June 30 (Q1). Consolidated net loss before exceptional items stood at Rs 436 crore, and at Rs 15,933 crore after factoring in the same.

It has made an incremental provision of Rs 10,744 crore (including net interest on total provision created considering interest rate based on the affidavit filed by the Department of Telecommunications, or DoT), which has been presented as an exceptional item.

According to DoT calculations, Airtel owes Rs 43,780 crore in AGR dues, of which Rs 18,004 crore has been paid.

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On July 20, it reserved its verdict on the issue of timeline for staggered payment. The matter is due for hearing on August 10.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) stood at Rs 10,639 crore, while Ebitda margin was 44.4 per cent, the statement said.

There was an uptick in 4G users by 43 million through the year — a growth of 45.3 per cent YoY, to reach 138.3 million in Q1.

During the quarter, Airtel and Carlyle inked a pact for Carlyle to acquire 25 per cent in Airtel’s Data Centre business, at a $1.2-billion valuation, subject to customary approvals.

First Published: Thu, July 30 2020. 22:11 IST
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