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Current tariff 'unsustainable'; need telcos, TRAI to support hike: Sunil Mittal

Sunil Mittal said that Airtel has clarified in the past that tariff hike is necessary, but the company cannot move ahead with it sans support from the rest of industry and regulator

twitter-logoBusinessToday.In | November 23, 2020 | Updated 00:08 IST
Current tariff 'unsustainable'; need telcos, TRAI to support hike: Sunil Mittal
Sunil Mittal, Chairman of Bharti Airtel

Bharti Airtel Chairman Sunil Mittal has stressed on the need for a hike in telecom tariff as the current rates are "unsustainable". However, he said that the telecom market and regulator would have to be on the same page before Airtel can go ahead with a tariff hike.

Mittal added that Airtel has taken a clear stance on the issue of tariffs and is of the view that a hike is necessary. Responding to a question on whether Airtel will take the lead on hiking tariffs or wait for the rivals to make a move, he told PTI, "...current tariffs are unsustainable but Airtel cannot move without the industry moving or the regulator moving."

The telecom industry needs a tariff hike at some point in time, but the market conditions will have to be conducive for it, Mittal asserted.

ALSO READ: Vodafone Idea's chicken-and-egg situation with tariff hike

In August this year, Mittal had described 16 GB data consumption a month for Rs 160 as a tragedy. The company has maintained that the average revenue per user (ARPU) should rise to Rs 200 and eventually to Rs 300 for a sustainable business model. Bharti Airtel's mobile ARPU in September quarter this fiscal stood at Rs 162, as opposed to Rs 128 in the year-ago period and Rs 157 in the preceding June quarter.

Mittal said that telecom being a "high capital-intensive industry" required a steady flow of investment into networks, spectrum, towers, and technology, which is important for the industry to be "sustainable".

"This industry needs tonnes of money, it is a highly capital-intensive industry... buying spectrum, putting out networks, fibre, radio, towers... this is a continuously investing industry," the Bharti Airtel Chairman noted.

"You have to, every year, spend billions of dollars afresh to get new technology, more coverage, more capacity... so this industry needs to be sustainable. The government wants India to be Digital India, and people to be connected. I think we will have to leave it in their safe hands," he further added.

ALSO READ: Supreme Court orders Airtel, Vodafone Idea to disclose details of special tariffs, offers to TRAI

As it is, the telecom policy and new digital communications policy state that revenue maximisation is not the objective, Mittal pointed out.

On Adjusted Gross Revenue (AGR) and the recent difference of opinion between Telecom Department and Bharti Airtel on when the next tranche of payment is due, Mittal pointed out that his company had already paid Rs 18,000 crore, which is "significantly more than anyone else".

"We have paid Rs 18,000 crore... whatever they decide... we have paid significantly more than anyone else... so we will see, when final decision comes," he said.

On the question of whether Chinese telecom equipment vendors will be allowed to participate in the rollout of next-generation 5G networks, Mittal said the larger question is that of the nation's decision and asserted "what the country decides will be accepted by everyone".

"It is not a question of being allowed or not being allowed. It is a question of country's decision... whatever the country decides, will be accepted by everyone," he asserted.

ALSO READ: AGR dues: Can Bharti Airtel and Vodafone Idea afford to increase tariffs?

On the pricing front, Mittal said 5G spectrum prices are "unaffordable" now, but added that India has ample time for its 5G road map.

"5G spectrum prices currently are unaffordable and India has the time. Nobody in world is far on 5G... even countries in Europe... the UK, the US... 5G coverage is still very sparse. So we are okay, India is not behind," he stated.

Asked when he expects a full-fledged 5G rollout in India, Mittal said, "The point is, when you need it... connected cars, robotic surgeries, that is what it is needed for. So, do we really have that on fire, at the moment? I don't think so."

When asked if 2G will become obsolete with the introduction of newer generation of telecom technologies, Mittal said that migration is already underway. Notably, Airtel has already closed its 3G operations.

"As soon as we can, we will keep on moving our 2G customers to 4G; that process is going on. That's the process, it just keeps happening evolutionary, organically, just every month," Mittal added.

(With PTI inputs)

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