Hike rates

Airtel tariff hike: Airtel to raise tariffs in 2022 to push ARPU to Rs 200: Gopal Vittal

Bharti Airtel is disappointed with the telecoms regulator’s recommended base prices for 5G waves, saying the industry had hoped for a much bigger cut which has not happened, Chief Executive Gopal Vittal said. It added that this should lead to another price hike in the 2022 calendar as it seeks to increase the average revenue per user (ARPU) to 200 rupees, with the market poised to “easily absorb” another hike.

“The industry had hoped for a massive reduction in prices; although there has been a reduction, it has not been adequate and in that sense is disappointing,” Vittal said during Airtel’s fiscal fourth quarter earnings call on Wednesday.

He added that he would not comment on Airtel’s “strategy and approach (5G auction) as it depends on the final reserve price finalized by the government”.

Shares of Airtel rose nearly 3% in early trade before giving up gains to end down 1.6% at Rs 696.05 on BSE Wednesday.

Vittal’s comments came a day after the Digital Communications Commission (DCC) stuck to Trai’s recommended base prices for 5G airwaves, while backing the views of a Department of Telecommunications panel. on airwave auctioning for 20 years. The telecommunications department is expected to seek Cabinet approval next week to get CDC’s opinion.

Trai’s recommendations are a blow to telecom operators who have been pushing for 5G reserve prices to be lowered by 90%, from the 39% average drop in 2018 prices suggested by the regulator last month.

Speaking on pricing, Vittal said, “We are expected to see a rise in pricing during this very year to push our ARPU up to Rs 200, although reaching Rs 300 is over a period of time. “.

The 3 major telecommunications operators had increased prepaid tariffs by up to 25% last November/December to increase APRUs.

Airtel’s MD acknowledged that there had been some SIM card consolidation among 2G phone users after basic prepaid rates were doubled to Rs 99, but said “bigger pain” is the continued shortage of semiconductors and rising chipset prices that have boosted entry-level smartphones. prices at nearly 10,000 rupees (compared to 6,000 rupees previously), which prevents customers from upgrading from 2G to 4G devices.

However, he expects this to be only a temporary moment, saying consumer behavior usually adjusts to a new normal over a period of time. In fact, Airtel added more 4G users (5.24 million) in the March quarter, compared to around 3 million in the previous three months, even after significantly increasing prepaid rates last November.

Vittal also expects “moderate 5G network deployments over the coming year” (timeline 2023) in the absence of significant 5G use cases and the modest share of 5G devices in the mix. number of smartphones. “Accelerated 5G deployments can only happen in the following years, once the contribution of 5G devices in India to total smartphones (pie) reaches around 14-16% by March 2024, from around 4 % currently,” he said.

Airtel’s managing director, however, declined to comment on a specific analyst question about “new market rumors around an entity in Airtel’s promoter group considering a stake sale, saying that “it was a shareholder affair that was better addressed to them”.

He, however, claimed that Airtel’s “significant shareholders – SingTel and the Mittal family – have stood by the company through thick and thin, and that their commitment was largely responsible for the telecom operator’s healthy balance sheet”.

At present, Airtel’s promoter group – the Mittal family and SingTel – owns 55.93% of the telecommunications company, with the rest held by the public. The Mittal family directly and indirectly owns approximately 24.13% while SingTel owns 31.72%.

At press time, questions directed to SingTel and Bharti Enterprises remained unanswered.

Bharti Airtel’s Q4 profit soared 164% YoY; dividend declared at Rs 3/share

NEW DELHI: Telecom major Bharti Airtel reported consolidated net profit of Rs 2,007.8 crore on Tuesday, recording a jump of 164.46 percent from Rs 759.2 crore in the same quarter last year.

Vittal was speaking a day after Airtel reported an almost 164% year-on-year rise in consolidated net profit in the March quarter to Rs 2,007.8 crore, driven by steep tariff hikes taken last November, strong user additions and one-time gains.

Analysts said Airtel outperformed Reliance Jio and Vodafone Idea (Vi) on India’s wireless business front in the fiscal fourth quarter, recording higher sequential revenue growth and even strong customer growth while rivals reported declines on this point.

“Airtel’s cellular revenue in India increased 9.5% from Jio’s 7.4% qoq / Vi’s 5.4% qoq in Q4FY22,” BofA Securities said. He added that Airtel also gained 3.1 million net subscribers against Jio/Vi which lost 10.8 million/3.4 million subscribers respectively.