Airtel sees room to raise tariffs on low-priced unlimited data plans

New Delhi: Telecom firm Bharti Airtel sees potential for raising tariffs on plans that offer unlimited data at lower price points, a senior company official said on Wednesday.

During the earnings call for the first quarter, Bharti Airtel Executive Vice Chairman Gopal Vittal said the company will step up investments in Africa, from where business contribution in overall business is set to rise as well.

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Bharti Airtel reported a 37.3 per cent increase in profit after tax to Rs 8,167 crore in the June quarter, driven by strong growth across India and Africa operations.

The revenue from operations during the quarter increased 18.3 per cent to Rs 58,539 crore from Rs 49,462.6 crore in the June quarter a year ago.

In response to a question if Bharti Airtel needs to hike tariff given that it is recording a healthy growth, Vittal said when the company talks about tariff repair, it is actually about the architecture of mobile plans in place.

"Which means that for a very low level of pricing, you get unlimited data, and that means ARPU is capped. That to me is not a healthy way to operate it because if you look at it, and we have talked about this before," Vittal said.

He said every market has offerings in terms of small, medium, large to extra large and therefore, there is need for "sensible price architecture" in mobile services.

Airtel India's average revenue per user (ARPU) increased by 5.6 per cent to Rs 264, highest in the industry, during the reported quarter compared to Rs 250 a year ago.

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Vittal said Airtel's Africa operations at present generate an annualised operational profit of over Rs 35,000 crore.

"If you look at the contribution of the Africa business to our portfolio, we expect that the contribution to growth will be substantially higher than the base contribution to the business. The investments into Africa, you know, will continue to step up. We have already stepped it up," Vittal said.

He said spectrum is quite cheap, which results in investment getting mainly into the network.

Vittal said that the company continues to build data centre capacity as per the plan and it is in the process of acquiring land parcels in Mumbai to scale up the capacity.

"Within the hyperscaler segment, a very large part of the workload runs out of Mumbai. Therefore, one of the key considerations for building one gigawatt is the right land parcels in Mumbai, which we are in the process of finalising," Vittal said.

He said that the company is in the process of building a couple of 100-megawatt data centres over the next couple of years.