Airtel CEO says users are using more data than what they pay for, confirms tariff hike soon

By Divya BhatiBharti Airtel Chairman Sunil Bharti Mittal recently announced that the telecom operator is planning to hike tariffs for recharge plans in the coming months. The big decision comes after Airtel started scrapping its minimum recharge plan of Rs 99 from many circles and hiked the value by raising the pricing of its minimum recharge plan price approximately 57 per cent to Rs 155.

In a recent interaction with the press at the ongoing Mobile World Congress, Mittal told PTI that the company is witnessing a “very low”return on the capital in business. So, in order to boost profitability, Airtel is expected to raise tariffs on its recharge plans by mid 2023. “It (tariff hike) will happen across the board,” Mittal said at MWC.

He further said that Airtel has a big capital which has made its balance sheet strong. However, due to the low return on capital changes are needed. “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 of increased pricing on people at the button of the pyramid, Mittal said that the hike in tariffs will be comparatively lower than what people spend on other things. While people are experiencing price hikes across various markets, and still not complaining about the rising pricing. So, for revised tariffs too, the impact will not be that significant. “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’s digital, economic growth is fully realised. I think the government is fully conscious, the regulator is conscious and people are also very conscious.” Sunil Bharti Mittal added.

Last year, in December, Airtel started scrapping its lowest prepaid recharge plan from Odisha and Haryana. The telecom operator removed the Rs 99 plan which used to offer 200 MB data and calls at Rs 2.5 paise/second. Instead, the company started listing its Rs 155 as the new lowest recharge plan offering Unlimited Local, STD and Roaming minutes, 1 GB of Data, and 300 SMS with a validity of 24 days. Later in January 2023, the plan was removed from eight more circles including Andhra Pradesh, Bihar, HP, Rajasthan, Northeast, Karnataka, and UP-West.

While the hike in lowest recharge plan offered by Airtel was around 57 percent, yet the company reported an increase in user base. So and so that in the recent report, Airtel took over Jio and topped the list of adding more monthly users. In addition, According to its Q3 report, Bharti Airtel net profit also jumped to 91 per cent i.e to Rs 1,588 crore.

As for the price hike, not just Airtel, but other telecom operators including Jio are also expected to hike tariffs in the coming quarters. A report by Business Insider suggests that telecom operators might announce 10 per cent hike in tariffs consequently in the next 3 years i.e. Q4 of FY23, FY24 & FY25. This could further hike the prices of mobile plans every fourth quarter of the coming years.