Bharti Airtel MD Gopal Vittal Pushes For Another Round Of Tariff Hike
Gopal Vittal, MD of Bharti Airtel, discussed the potential for further tariff hikes to improve Airtel’s revenue per user, following a steady Q2 with ARPU reaching ₹233, nearing the ₹300 target.
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(Photo source: Usha Kunji/NDTV Profit)
The opportunity to take up tariff hikes in the future is very high, said Bharti Airtel Ltd.'s Managing Director, Gopal Vittal. Only time will tell when the next round of tariff hikes will take place, but it will impact the nearly 35.2 crore Airtel customers in India.
The most recent tariff hike was enforced in July this year, which prompted an increase of around 70 paisa per day.
“The return on capital employed, or ROCE, is still very low at 11.2%, and the only way to improve this is another round of tariff repair," Vittal said.
Vittal made his remarks during the earnings call following the release of its Q2 results for FY25.
The average revenue per user per month, also referred to as ARPU, came in at Rs 233 for the quarter ended September, which has taken Airtel closer to its target of Rs 300.
Customers spend 5-6 hours every day on phones, but the cost of a subscription for the whole month is lower than going to watch a movie. If we have to aspire for continued investment in this critical infrastructure, which is a heavy capex business, and put the best tech out there, we have to constantly look at means through which we can increase the ARPU.Gopal Vittal, MD & CEO, Bharti Airtel
On the aspect of ARPU growth, Vittal indicated that outside of tariff increases, Airtel will sustain growth through the steady transition of prepaid customers to the postpaid segment, monetisation of data once a customer's allowance is exhausted, international roaming, and the increasing shift of customers to smartphones.
Vittal also stated that with the recent tariff repair that took place, Airtel did not see any significant down-trading, and it was able to hold on to its user base and move them into the right plans.
