Bharti Airtel Chairman Sunil Mittal on Monday said the company has taken baby steps towards increasing prices and it will not shy away from tariff hikes.
Addressing an investor call, a day after the company announced raising up to Rs 21,000 crore through a rights issue, Mittal said Airtel has taken small steps towards increasing prices and it has been received well by the customers. However, the company is bound by market forces and cannot go beyond a point.
"We will be happy to take small baby steps which could even be first and foremost compared to others. So, I can assure that we will not shy away from doing it (tariff hike). This Rs 79 (plan) and some post-paid plans which have been taken up are a testimony that we have run out of patience and we have taken the first move," Mittal said while replying to a question on tariff hike.
He said tariffs and ARPU or Average Revenue Per User has to improve if the industry has to remain sustainable, and estimated that the industry's ARPU would reach Rs 200 per user per month by the end of the current financial year and eventually move to Rs 300.
On Sunday, the company's board approved raising up to Rs 21,000 crore through a rights issue. The issue will be priced at Rs 535 per fully paid-up equity share, while the rights entitlement ratio will be one equity share for every 14 equity shares held by eligible shareholders as on record date.
Also Read: Bharti Airtel to raise up to Rs 21,000 cr through rights issue
The fund-raising plans will give the firm the fuel to shift to a higher gear and tap large opportunities by accelerating investments in the rollout of 5G services, fibre, and data centre business, Mittal said.
"This capital will help improve the leverage position for the company and simultaneously provide the fuel to accelerate investments across several parts of our portfolio to drive for competitive and profitable growth," Mittal said.
Saying that rollout of 5G services is likely to begin in the country in the second half of 2022, Mittal said he hopes that the government keeps the price of the spectrum "attractive".
He said the industry has been urging the government to address some pressing issues "inhibiting" continued investments in the sector and added that the taxes on the industry remain high.
"For every Rs 100 of revenue, Rs 35 go in various forms of levies. We hope that as we step up and do our part, the government will also favourably look at some of the genuine demands of the industry, enabling a multiplier effect and positive outcome," the chairman said.
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