Vittalspeak: Bharti Airtel will not be first to hike tariffs

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February 05, 2021 5:10 AM

For perspective: Bharti's recent strong operational performance continued as it added 14.2 million subscribers in Q3, including 12.9 million 4G subscribers. In comparison, Jio added 5.2 million subscribers in Q3.

“This was the second consecutive quarter of outperformance by Airtel over Jio in terms of net subscribers additions as well as quarter-on-quarter mobile revenue growth,” Credit Suisse wrote in its report.“This was the second consecutive quarter of outperformance by Airtel over Jio in terms of net subscribers additions as well as quarter-on-quarter mobile revenue growth,” Credit Suisse wrote in its report.

Despite accepting the need for tariffs to increase so that the average revenue per user (Arpu) moves up in the range of Rs 200-300, Bharti Airtel is not going to take the lead on this front at this point of time.

Speaking to analysts in a post-earnings call on Thursday, MD and CEO (India & South Asia) Gopal Vittal said the company’s tariffs are in the premium range and therefore a hike at this stage may impact its competitiveness. However, if competitors raise tariffs Bharti would also do the same, he added.

“Tariffs should go up. The Arpu needs to go up to Rs 200 in near term and ultimately to Rs 300. But having said that, pricing is a competitive issue and we are already on a premium. We will raise tariffs if the competition does so,” Vittal said.

Analysts have also said since Reliance Jio’s subscriber addition remained muted during the quarter, it is unlikely to raise tariffs and therefore any tariff hike by Bharti Airtel is also ruled out.

“Bharti’s subscriber additions across postpaid and prepaid data segments indicate strong market share gains in Q3. Given the strong subscriber traction, we raise our subscriber estimates 5-8%. However, given moderating subscriber additions of Reliance Jio, we maintain that tariff hikes will likely be delayed,” brokerage firm Jefferies wrote in a report on Thursday.

“This was the second consecutive quarter of outperformance by Airtel over Jio in terms of net subscribers additions as well as quarter-on-quarter mobile revenue growth,” Credit Suisse wrote in its report.

For perspective: Bharti’s recent strong operational performance continued as it added 14.2 million subscribers in Q3, including 12.9 million 4G subscribers. In comparison, Jio added 5.2 million subscribers in Q3.

Bharti, which reported its October-December quarter results on Wednesday, continued to improve its Apru which at Rs 166, was 2.4% higher than the preceding quarter and is the best in the industry. Minutes of voice usage per customer per month improved 2.2% quarter-on-quarter at 1,027 minutes. Data usage per customer per month was up 2.2% sequentially at 16,766 MB, which is the strongest in the industry. Total data volume saw a jump of 10.7% q-o-q at 8,453,706 million MB.

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