Bharti Airtel founder and chairman Sunil Bharti Mittal has called for a significant increase in India's mobile tariffs, proposing that the average revenue per user (ARPU) should rise to approximately ₹350 per month. Speaking on the occasion of Bharti Enterprises' 50th year, Mittal emphasized that the current pricing structure is unsustainable given escalating operating costs and the immense capital needed for expanding the nation's digital infrastructure.
Mittal highlighted that the ₹300 monthly ARPU he suggested a decade ago is no longer sufficient. Factors such as inflation, along with higher costs for electricity, fuel, employee salaries, and administrative expenses, have driven up operational expenditures across the telecom sector.
The Imperative for Infrastructure Investment
A key argument for the tariff hike is the critical need for robust infrastructure development. Mittal pointed out a stark disparity in mobile tower density between India and China, noting that India possesses around 350,000 towers compared to China's more than 1 million. To meet future demands and enhance connectivity, India would need to at least double its existing tower infrastructure, alongside laying more optical fiber, establishing submarine cables, and expanding satellite communication capabilities.
Operators require stronger balance sheets to sustain these massive investments, which underpin a wide array of digital services, from UPI payments and banking to education, direct benefit transfers, healthcare records, and entertainment. Without adequate revenue, the sector's ability to innovate and expand is hampered.
5G Rollout and Revenue Challenges
Mittal also addressed the substantial investments made in 5G technology. Telecom operators have spent lakhs of crores on spectrum purchases and an additional ₹1.5 lakh crore on network infrastructure. However, he noted that 5G has yet to generate the new revenue streams the industry had initially anticipated. He expressed concern that while telecom companies undertake heavy infrastructure investments, they do not achieve valuations and profitability comparable to the digital platforms that heavily rely on their networks.
Despite the proposed increase, Mittal maintained that a ₹350 monthly ARPU, translating to roughly ₹10-12 per day, would remain affordable for the vast majority of users, considering the extensive range of services mobile connectivity enables. He suggested that entry-level packages could still be priced above ₹200, while premium plans might range from ₹500 to ₹800 or higher.
Currently, Airtel reported an ARPU of ₹271 in the September quarter, up from ₹256 a year earlier. The proposed industry-wide ARPU of ₹350 would represent an approximate 29% increase from Airtel's present level.