‘35% of tele revenues go to govt’

A day after announcing capitalraise of Rs 21,000 crore via a rights issue, telecom czar Sunil Bharti Mittal on Monday made a passionate pitch for hike in tariffs and a cut in government levies to save the industry.

Mittal, the chairman of India's second largest telecom company Bharti Airtel, said while 35 per cent of industry's revenue goes to the government in taxes and levies, telcos are loaded with an extraordinary debt of AGR (Adjusted Gross Revenue) dues and spectrum payments.

"People are consuming average 16GB of data per user per month. It is time that tariffs do take a tick up to make the industry viable and, more importantly, have decent and appropriate returns on capital to grow into more technology areas, to roll out more networks, and become more viable model of sustainability in the future," Mittal said.

He stressed that the industry needs to have "right economic model", and rued that "for far too long, we have played in this game by growing this industry at a very minimal pricing level".

Levies are far too high in the telecom sector, Mittal said adding that "levies and load on industry needs to be brought down" for India to truly realise its digital vision.

Mittal made it clear that Airtel will not shy away from raising tariffs. He argued that tariff changes effected by Airtel over the last few months are a "testimony" that the company has indeed "run out of patience".

In a rare move, the Bharti Airtel Ltd chairman attended about an hour-long investor call, answering queries related to the rights issue as well as those pertaining to the telecom sector.

Asked if Airtel will take a lead in raising tariffs in future, Mittal said that the company has already been doing it in a limited manner by pushing up base tariffs to Rs 79.

"Can this go to Rs 99 eventually, my answer is yes, the question is when...In the end, we are also bound by market forces, we can't be outlier beyond a point. You can be having some premium given strength of the brand but you can't go beyond a point where you start to hurt yourself," Mittal observed.

People are consuming average 16GB of data per user per month. It is time that tariffs do take a tick up to make the industry viable and have decent and appropriate returns on capital