Talking Point - ‘Business unviable if market conditions do not drive tariff hikes’: Bharti Airtel Sunil Mittal

On the issue of whether or not Chinese telecom equipment vendors will be allowed to participate in 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.”

Where tariffs are concerned, the company has already taken a clear stance on the issue, he said adding that Airtel is of the firm view that tariffs need go up.

“...current tariffs are unsustainable but Airtel cannot move without the industry moving or the regulator moving,” Mittal said.

Industry needs a tariff hike at some point in time, he said adding “we will have to see the market conditions to do it”.

Mittal was replying to a question on the timing for what seems to be an imminent industry-wide tariff hike in the Indian market and whether Airtel will initiate it or wait for rivals to make their first move.

In August this year, Mittal had described 16 GB data consumption a month for Rs 160 as a tragedy. The company has maintained that 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 stood at Rs 162 for the September quarter from Rs 128 in Q2 FY20, and Rs 157 in the preceding June quarter.

The Bharti Group supremo - who has time and again drawn attention to the high taxes and levies in the sector - further said that telecom being a “high capital-intensive industry” required a steady flow investments into networks, spectrum, towers and technology and it was therefore important for the industry to be “sustainable”.

“This industry needs tonnes of money, it is a high capital-intensive industry...buying spectrum, putting out networks, fibre, radio, towers...this is a continuously investing industry,” Mittal said.

Unlike setting up of steel or power plants, or refineries, the telecom sector needs a continuous and recurring infusion of capital.

“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. 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 said.

As it is, the telecom policy and new digital communications policy states that revenue maximisation is not the objective, he added.