Bharti Airtel on Tuesday said that the company will soon achieve the target of average revenue per user (ARPU) of Rs. 200-300 in the coming months.
The company has been targeting this ARPU range for long because since the launch of Reliance Jio in 2016, not only Airtel but also other telecom operators have not been able to reach this target.
But, now, the company was hopeful of achieving this ARPU soon, Gopal Vittal, Managing Director and Chief Executive Officer, India & South Asia, Airtel, said in an earnings call.
“We believe that an ARPU of Rs. 154 is inadequate to turn a reasonable return on capital as a company and remain hopeful that ARPUs will get to Rs. 200 in the short term and eventually to Rs. 300 which is where it should be for a business like ours,” he said.
During the quarter gone by (January-March), the company reported that its ARPU increased by Rs. 19 in the quarter to hit a level of Rs. 154.
“Of course even at this level of ARPU, we believe we will be very well placed to serve all the lower-end customers who may have the capacity to pay Rs. 100 or less,” Vittal said.
He said this growth in ARPU was without any tariff hikes and that is a good sign for growth. And, as the difference between pre-paid and post-paid customers are narrowing, and with customers shifting from 2G to 4G, there will be significant growth in future.
“The full impact of the tariff hike of December 2019 came through in its entirety with no down trading. This again reflects the resilient and quality customer base we have. Even more heartening, 4G customer additions saw continued momentum at 12.5 million,” Vittal said.
He said this number would have been even better if not for the sudden jolt of Covid-19 that the company dealt with. The quarter also saw strong post-paid net additions.
Vittal said this pandemic has been unprecedented and has destroyed millions of livelihoods and keeping in mind the Airtel teams have been working from remote locations to keep the network humming and risking themselves to keep customers connected.
“It is now abundantly clear that telecom is truly an essential service and has been the backbone of the economy at this time. We are, therefore, hopeful that the government will implement the proposals of the TRAI and the intent of the new Telecom Policy to lower the burden of taxes and levies as soon as possible,” Vittal added.
Airtel on Monday reported a consolidated net loss after exceptional items at Rs. 5,237 crore, for the fourth quarter ended March 31 as compared to a net profit of Rs. 107 crore in the corresponding period last year. However, its consolidated revenues grew by 15 percent year-on-year (YoY) to Rs. 23,723 crore from Rs. 20,602 crore in January-March quarter last year.
—The Hindu Business Line