NEW DELHI: Prices for voice and data services must increase as current rate levels are unsustainable for the industry, Bharti Airtel Ltd CEO Gopal Vittal said on Wednesday.
Vittal, who was addressing investors in a post-earnings conference call, did not give a timeline on the rate hike, but expressed confidence in a price hike going forward. He said the telco aims to achieve an average revenue per user (ARPU) of ₹200 and ₹300 eventually.
“We have a premium (in terms of rate increases). In the telecommunications space, it may have a premium, but it becomes unsustainable after a moment. We don’t want to slow down our growth, “Vittal said when asked why Airtel doesn’t want to take the lead in raising rates.
Vittal said the telecom operator will continue to focus on serving quality 4G clients, a trend that was also seen in the September quarter. During the quarter, Airtel posted a 14.4 million sequential growth in the 4G user base to 152.7 million, 48% more than a year ago.
The telecommunications company now has 440 million users in 16 countries. Arpu of Airtel rose to ₹162 during July-September from ₹128 a year ago, and ₹157 in the June quarter.
Vittal said Airtel is looking into the low-cost smartphone space, adding that the telco has yet to decide on an approach and is focusing on migrating its 2G / 3G clients to the 4G network.
“When it comes to low-cost smartphones, we have seen one of our competitors try to develop a low-cost smartphone. We are studying space, “Vittal said.
In July, rival Reliance Jio Infocomm Ltd, owned by Mukesh Ambani, announced the launch of an entry-level low-cost smartphone in partnership with Google Inc. Jio, which provides only 4G services, is now the largest telecom operator. by market share.
In the conference call, Vital said that the rollout of 5G technology will take a few more years as India has an underdeveloped ecosystem. He said that reserve prices for spectrum that enables 5G services are unaffordable and act as a deterrent to 5G deployment.
A boom in remote work fueled a 58% year-on-year increase in data consumption at Bharti Airtel in the September quarter, helping India’s second-largest telecom company post record consolidated revenue, offsetting the net loss of the company during the quarter.
The company posted its highest consolidated quarterly revenue of ₹Rs 25,785 crore for the three months ending in September, up 22% from a year ago. However, it recorded a consolidated net loss of ₹Rs 763 crore due to higher expenses and net finance costs.
Presented a consolidated net loss of ₹23,045 crore in the second quarter of fiscal 2020. A Bloomberg survey of 10 analysts had estimated a profit of ₹Rs 121.60 crore for the September quarter.
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