Airtel founder Sunil Mittal says your mobile bills need to increase significantly

• Airtel founder and chairman Sunil Mittal said mobile tariffs need to go up significantly to make it viable for telecom companies.
  
• The remarks came at the company’s investor call to announce the ₹21,000 crore fundraise.
  
• Mittal also called on the government to “look favourably at some of the genuine demands of the industry”.
  

Sunil Mittal, founder of Indian telecom giant Airtel has said that mobile bills of its users need to go up significantly for it to be viable for the company, as he announced the ₹21,000 fundraising via rights issue of equity shares.

The share market rejoiced, reacting to the news. Airtel’s shares ended the day up by 4.25%, suggesting that the investors and traders alike approve of Sunil Mittal’s statements.

Mittal highlighted the need to increase tariffs by as much as 33% by the end of this year, and eventually, doubling from the existing levels. This is despite the fact that Airtel has already increased prices from sub-₹400 levels to sub-₹600 levels for its 84-day plan, for instance.

With that said, Airtel’s current average revenue per user (ARPU) stands at ₹146, which is the highest in the Indian telecom industry. The company wants this to increase to ₹200 by the end of the year, suggesting that a tariff hike is imminent.

It’s not clear if Airtel will wait for Vodafone Idea or Reliance Jio to hike tariffs or if it will take the lead this time around. However, Airtel and Vodafone Idea have both increased their base plans to ₹79 from ₹45-₹49 in select circles as the two companies look to boost their revenues.

Mittal urges government to look ‘favourably’ at industry demands

Pointing out that the Indian telecom industry has stepped up in enabling digital access to Indian citizens, Mittal urged the government to look ‘favourably’ at the demands of the industry.

“The taxes on this industry remain high. For every ₹100 of revenue, ₹35 go in various forms of levies. We hope that as we step up and do our part, the government will also favourably look at some of the genuine demands of the industry enabling a multiplier effect and positive outcome.”

Fundraising to be used to fuel growth across mobile, broadband segments

Mittal also underlined that the fundraise of ₹21,000 crore will be used to fuel growth across mobile, fibre broadband, enterprise and data centre businesses.

For instance, the company says it will roll out 5G support in the second half of the financial year 2022-23, while the 5G spectrum auction is expected to happen sometime early in 2022.

“Airtel as a leader intends to roll out 5G network in key cities at the earliest to be able to provide the benefits of the new-age networks to its customers, especially the heavy users and industrial applications,” the company’s statement said.

The company says it will utilise the funds to accelerate the roll out of its fibre network to coincide with the 5G network roll out.

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