Trai must step in to restore sector’s financial health: Mittal
NEW DELHI: The Telecom Regulatory Authority of India (Trai) needs to step in to ensure that mobile tariffs move up and the financial health of the sector is restored, Bharti Airtel chairman Sunil Mittal said on Thursday.
“Indian consumers have been enjoying low rates. They will continue to enjoy low rates, but I think we need to have a balance between the requirement of investments and the consumer on the other side,” Mittal said after meeting finance minister Nirmala Sitharaman for pre-budget consultations.
Monthly billings or Arpu (average revenue per user) must move up from the current levels to ₹200 a month to ensure that the sector stays viable, he said.
“My view is ₹200 Arpu (is ideal), eventually going to ₹300 Arpu. At the lower end (customers can pay) ₹100 a month for consuming rich data, voice and other services, and on the upper hand ₹450-500, and therefore (we will reach) a blended eventual landing point of ₹300 a month. This’ll still be $4 a month, and by far the lowest anywhere in the world, and yet consuming two-three times more data than anywhere else in the world,” he said.
“That’s the balance we need to get to. Trai needs to work on this because the industry has not been able to have an orderly mechanism to get to that point,” he said.
Airtel recorded an Arpu of ₹128 in the September quarter, down from ₹129 in the June quarter. Arpu is the total revenue of an operator divided by the number of users, or connections, on its network. The network’s bitter rival, Jio, has also saw its Arpu drop, with the figure falling to ₹120 with 355.2 million users as of September-end, from ₹122 with 331.3 million users as of June-end.
Mittal’s comments come two days after the telecom regulator started a consultation process to determine if regulatory intervention is required in fixing tariffs and the need for a floor price for mobile services. All three operators are unanimous in their demand for a floor price.
The regulator has also sought consultation on issues such as the methodology to fix a floor price and ways to ensure that it does not give a section of operators windfall profits. It has also sought suggestions on whether floor prices should be fixed for both data and voice services.
Mobile tariffs are currently under forbearance, which means operators have a free hand in fixing rates—they only have to report tariff plans to Trai within seven days of the launch. If a floor price is set, free services could become a thing of the past. This would bring relief for Bharti Airtel and Vodafone Idea, which have been clamouring for an increase in tariffs.
“We are unnecessarily killing this industry in a manner which is not conducive for our industry. Therefore Trai needs to step in,” Mittal said.
Vodafone Idea and Bharti Airtel, which have battled cutthroat tariffs from Jio for the last three years, reported record losses for the September quarter.