Telecom industry under stress, tariffs need to go up, says Bharti Group chairman Sunil Mittal

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July 02, 2021 4:45 AM

Mittal’s statement comes just a day after Vodafone Idea once again posted a big loss of Rs 7,023 crore during the January-March quarter and said that there exists material uncertainty relating to its ability to continue as a going concern.

Bharti Airtel led the decline with a loss of 4.61 million subscribers followed by Vodafone Idea, which lost 4.28 million. State-run BSNL lost 880,810 users.Bharti Airtel led the decline with a loss of 4.61 million subscribers followed by Vodafone Idea, which lost 4.28 million. State-run BSNL lost 880,810 users.

Bharti Group chairman Sunil Mittal on Thursday once again underlined the tremendous stress the telecom industry is going through while exuding optimism that the government would surely do something to ameliorate it so that the country’s digital dream remains intact with three operators in play. Mittal also said that telecom tariffs need to go up and Bharti would not hesitate in raising them but added it cannot do so unilaterally.

“To say the telecom industry is in a bit of trouble is an understatement. It is in a tremendous amount of stress. I hope the government, the authorities, and telecom department focus on this issue and ensure India’s digital dream remains intact through the provision of at least three operators,” Mittal said at a virtual interaction with journalists on the launch of 36 satellites by OneWeb, a satellite communications company led by Bharti Global and the UK government.

Mittal’s statement comes just a day after Vodafone Idea once again posted a big loss of Rs 7,023 crore during the January-March quarter and said that there exists material uncertainty relating to its ability to continue as a going concern.

Mittal said the government is aware of the issue and the industry is hopeful of some action from the government. “…how they do it and what balm they apply to this sector, this is best left to the government and the experts. I really don’t know what they have in mind but in the end, I know they are concerned about it and I am very hopeful something would happen,” he added.

To a question on increasing tariffs, Mittal said the debate has been going on for a long time as the current rates are not sustainable. “We had an Arpu (average revenue per user) of Rs 220-230 before Jio came in and people were consuming 1 GB data a month…today industry is at Rs 140, significantly lower than where it was six years back and people are consuming 15 GB a month. It’s just not sustainable where we are today,” he said.

He, however, said the industry is not talking about massive increases in tariffs but just wants to cross the Rs 200 mark, which will still be lower than six years back and people can still consume 15 GB data for price less than six years back. People at the lower end can still pay Rs 70-100 but the middle to higher end users, instead of paying the Rs 250-300, can pay Rs 350-400. “How long can you keep on killing each other…just bring it back to the old tariffs. We will not hesitate to do it but it can’t be done unilaterally,” Mittal added.

He said that the last 5-6 years had been brutal and pointed out that the results are for all to see. “Ten operators gone out of business, two merged together…gasping for breath right now,” Mittal said, adding that the industry needs to be healthy for embarking on 5G services, and to deliver on India’s digital dream.

Mittal said that Bharti Airtel had raised funds timely and adequately, through equity and bonds, and asserted that the company is strongly positioned to serve the market in coming years. “We never went into the woods at all. We are strong a company, many a time we are underestimated in our resolve,” he said.

Meanwhile, Bharti Enterprises-backed OneWeb, the Low Earth Orbit (LEO) satellite communications company, has successfully released another 36 satellites to mark the completion of its ‘Five to 50’ mission. With this major milestone, the company is on the way to deliver connectivity across the United Kingdom, Canada, Alaska, Northern Europe, Greenland, and the Arctic Region.

Asked about India plans for OneWeb, Mittal said the company will be able to sell most of the capacity in one year. “The contracts will be with mobile operators, defence authorities, forest department, railways, shipping agencies, lots of discussions are currently underway, market remains big,” Mittal said. The pricing for satellite services are bound to be expensive and that’s why, OneWeb is not looking for millions of customers.

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