Return On Capital Very Low, Expects Tariff Hike: Bharti Airtel Chairman

The Return on capital in the telecom business is very low and a tariff hike is likely to be the mid of this year, Bharti Airtel chairman Sunil Bharti Mittal said here on Monday.

While responding to a PTI query at the Mobile World Congress, Mittal said that the company has a healthy balance sheet and there is no need to raise any more capital.

"Lot of capital has been injected that has made the balance sheet strong but the return on capital of this industry is very low. That needs to change. We are talking of small increments that need to come in the Indian tariff situation. I hope half (by mid) of this year," Mittal said.

When asked about the impact on people at the bottom of the pyramid, he said that the hike is low compared to the spending people are making on other things.

"Salaries have gone up, rents have gone except one thing. There is no one complaining. People are consuming 30 GB for almost paying nothing. We don't have more Vodafone type of scenarios in the country.

"We need a robust telecom company in the country. The dream of India is digital, economic growth is fully realised. I think the government is fully conscious, the regulator is conscious and people are also very conscious," Mittal said.

He said that he disagrees that the tariff hike is impacting people at the bottom of the pyramid.

Sunil Bharti Mittal-led Bharti Airtel last month increased the price of its minimum recharge for the 28-day mobile phone service plan by about 57 per cent to Rs 155 in eight circles.

The company stopped its minimum recharge plan of Rs 99, under which it offered 200 MB of data and calls at the rate of Rs 2.5 paise per second.

Bolstered by the price hikes last year, the India Mobile Average Revenue Per User (ARPU) of Bharti Airtel soared to Rs 193 during the December quarter of 2022-23 from Rs 163 in December 2021 quarter.

While the short-term ARPU target of Airtel is Rs 200, its focuses on a medium to long term ARPU target of Rs 300 through price hikes for sustainable operations.

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