Bharti Airtel CEO Gopal Vittal Calls Out Broken Pricing Architecture
Vittal has time and again underscored the need for a "tariff repair" for the financial health of the company.
Customers who can afford to pay more are paying "a lot less" due to unlimited phone plans, said Bharti Airtel Ltd.'s Gopal Vittal. The architecture of pricing in India is "broken" due to "one size fits all" plan, he said.
"If you look at markets like Indonesia or Thailand or any of the markets in Asia, you'll find small, medium, large, extra large. And there's a pathway to upgradation that unfortunately is not the case in India," Vittal, managing director and chief executive officer of Bharti Airtel said, during an earnings call.
However, Vittal said that this is an industrywide issue and that the company would be "happy to follow" usage-based pricing for 5G plans. The company's 5G rollout is nearly complete, but has not been monetised yet.
The telecom industry is likely to see a tariff hike after the elections. Vittal has time and again underscored the need for a "tariff repair" for the financial health of the company.
"You will need substantial repair in industry," he said, adding that even as the Average Revenue Per User rises to Rs 300, it would still be the lowest in the world.
The second largest telecom player reported an ARPU of Rs 209 in the fourth quarter of FY24, as compared with Rs 208 in the previous quarter.
Vittal said that it is imperative to have multiple rounds of tariff hikes, even though the quantum of hikes is yet to be determined.
"The fact is that the digital and mobility today has become so essential to people's lives that people will adjust their spends to deal with any increase."
The company's net profit declined 28% sequentially to Rs 2,068 crore in the January-March quarter, missing analysts' estimates. It reported an exceptional charge of Rs 2,455.5 crore, largely on account of devaluation of the Nigerian currency Naira.
Meanwhile, its revenue fell 0.8% to Rs 37,599 crore, while margin was largely flat at 51.5%.
Bharti Airtel's India customer base stands at 56.19 crore subscribers across 16 countries, up 2% from the quarter-ended December. India customer base rose 8% year-on-year to 40.92 crore.
The capex for India for the quarter stood at Rs 8,491.2 crore, as compared with Rs 8,989.4 crore in the previous quarter, down 6%.
The company also approved a final dividend of Rs 8 per share of face value Rs 5 each, and Rs 2 per partly paid share of Rs 5.
