Airtel says hike rates, but shuns first step
Telecom market leader Bharti Airtel today said the industry will need to raise tariffs as margins of operators are getting hurt at the current rate but ruled itself out to be the first to take the step.
"The current tariffs do not even cover marginal costs for most operators. So from an economics perspective, do we need to increase prices? The answer is yes," Bharti Airtel CEO (India and South Asia) Sanjay Kapoor said on the sidelines of the World Economic Forum on India here.
Competitive pressures have prevented telecom operators from hiking rates and are waiting to see who blinks the first.
Cautioning that the longer the decision on tariffs is delayed, the more harmful it will be for the industry, he said: "How long can this decision be delayed is anybody's guess. I think the more we delay these decisions, it will hurt the industry more."
When asked if Bharti Airtel would be the first to blink and take a price hike, Kapoor said: "We have been prudent and we will be prudent but in such a market, machoism doesn't help every time. I have shareholders to answer to, I need to sustain my market share at one end and profitability at the other end. I have to do that. It is (the) balance I need to keep doing."
Commenting on the impact of such a competitive market and inability to hike price, he said: "What is happening as a result of a move not being made is that it's a slow
