The CEO of Airtel Has Said that The Company Will Increase Prices Again This Year.

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The CEO of Airtel has said that the company will increase prices again this year.

Just last year, prepaid plan fees were increased by telecom firms including Vodafone Idea, Reliance Jio, and Airtel. In a big setback for customers, Airtel is now preparing to raise the cost of its prepaid plans.

Gopal Vittal, the CEO of the company, reaffirmed the information. He disclosed that a price increase by Airtel in 2022 is likely. The average revenue per user (ARPU) will be 200 rupees this time.

According to a report in the Economic Times, Airtel is not pleased with the 5G base pricing set by the telecom regulator. Vittal stated on the earnings call on Wednesday that “the industry had hoped for a big decrease in prices; while there has been a reduction, it has not been adequate and is in that sense, disappointing.”

All three independently held telecom companies raised their plan pricing by roughly 18 to 25% last year. The TRAI’s recommendation for 5G reverse tariffs has not gone over well with the telecom companies. The businesses pushed for a 90% reduction in 5G reserve fees.

“I believe that during this year, we should start to see some tariff rises. I do think that the tariffs are still quite modest at that point. The first step is to reach 200, which will need at least one round of tariff increases, according to Vittal.

Customers will be able to take the hit, according to Vittal. The new price increase would only be a brief outlier. Despite the price increase, Airtel added more 4G users in March (5.24 million). Compared to the 3 million subscribers during the preceding three months, this was more.

It should be noted that Airtel was the first to raise the cost of prepaid plans by 18 to 25% back in November 2021. While Reliance Jio increased costs by up to 20% last year, Vodafone Idea likewise updated its rates in a similar range. Notably, Reliance Jio has not yet disclosed if it intends to raise prices in 2022 if and when a tariff increase takes place.

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Why Did Bharti Airtel Choose to Increase Its Prices for All Prepaid Plans?

Since the advent of Reliance Jio Infocomm, which is sponsored by Mukesh Ambani, the telcos have been competing against one another by decreasing call and internet usage charges.

Over the past five years, the rivalry has been so fierce that some telecoms have chosen to close their doors while others, like Vodafone and Idea, have decided to work together to withstand the onslaught brought on by Reliance Jio’s substantial financial resources.

The situation was so bad that telcos requested some sort of government involvement to guarantee that there was a ceiling on pricing. The telecoms voluntarily made the decision to jointly hike their charges, despite the fact that the government took no action.

Bharti Airtel is one of the carriers that has made a strong case for raising the average revenue per user (ARPU) from the current range of Rs 100 to 150 to Rs 300. The telco stated in a statement that the pricing increase would “enable the massive investments required in networks and spectrum” and that it would “mark the start of returning to Rs 200 ARPU.”

Ceo of Airtel Suggests a Rate Increase in 2022

Due to higher tax expenses, Airtel reported a 2.8 percent year-over-year decline in net profit in Q3 FY 22. The quarter’s net profit was Rs 830 crore. In the third quarter, the company’s free cash flow increased to Rs 8803 crore from Rs 7046 crore the year prior.

Director of Strategy and Business Development for the Bharti Group, Harjeet Kohli, stated that the company would use free cash flow to pay down high-cost debt.

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The company saw cost challenges as a result of increased diesel prices, and operating costs also went up as a result of accelerated network expansion and capacity improvements.

 

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