Airtel Targeting Higher ARPU of Rs 300, Another Tariff Hike Around the Corner

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Bharti Airtel recently released its quarterly report as per SEBI guidelines. The telco reported an increased average revenue per user (ARPU) of Rs 157 in the Q1’21. Gopal Vittal, CEO of Bharti Airtel said that the telco will be looking for reaching a higher ARPU mark in the coming time. This is so that the telco could ensure that it is running a sustainable business with a good and strategic business model. Vittal said that Airtel would stop working with its Chinese partners ZTE and Huawei in case there is a notification from the government. But then that would mean the telco will have to purchase the 5G spectrum from either Indian companies or from some other country, which will be quite expensive for the company.

Tariff Hike Necessary to Ensure Higher ARPU

Airtel doesn’t offer the cheapest plans right now. That said, Vittal noted that the tariffs have to go up even further. The only question that needs to be answered is that when is the right time to do so. Higher tariffs will ensure that ARPU of Bharti Airtel reaches Rs 200 from the current Rs 157 and then later Rs 300 as well. This will help the telco in maintaining a sustainable business model and along with that will help them in making meaningful capex expenditure.

Vittal said that Bharti Airtel is not in a hurry for deploying 5G services. The telco believes that the current base price for 5G airwaves which is set by the regulator is not the right one, it is far too expensive than what it should be. Vittal further said that it would take years for India before it can get the 5G ecosystem which makes any impact.

Along with that, Bharti Airtel has shut down its 3G network and services. But the telco is yet to move on from the 2G network. Vittal said that they are not in any hurry for shutting down the telco's 2G services. Only when the revenue coming from the 2G network is very low, the company will make a decision on continuing it or not.

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