Airtel Can Increase Tariff Due To Rs 16,000 Crore Loss; Rs 300 Revenue From Every Airtel User?
Bad news coming in for all Airtel users in India.
Airtel can very well increase their tariff any moment now, since they have suffered massive Rs 16,000 crore this quarter.
And ARPU or Average Revenue Per User of Rs 300 is what Airtel wants now, to sustain their business operations.
How will the consumers get impacted here?
Airtel Can Increase Tariff Soon
While speaking with the analysts, Airtel CEO Gopal Vittal has very strongly, and very openly hinted that the tariff will increase very soon.
Airtel has suffered losses of Rs 15,933 crore in the June quarter, and they are looking ways to increase tariff, to maintain their operations and revenues.
He didn’t reveal when the tariff will go up, but he expressed confidence that the tariff will increase soon.
He said, “We continue to believe that ARPUs need to move up to 200 and eventually to 300 for a sustainable business model…I think tariffs have to go up, and the question really is the right timing for it. We believe that at some stage we should be ready for it, I can’t comment on specifics of when,”
Rs 300 ARPU Needed By Airtel
For the quarter ending June, 2020, Airtel earned Rs 157 per user, which is certainly higher than Rs 154 per user they earned in the last quarter.
However, this marginal increase in ARPU or Average Revenue Per User is not enough, since they have incurred huge losses of Rs 16,000 crore.
Airtel wants the ARPU to increase to Rs 200, and then Rs 300 eventually to sustain and maintain their operations.
The last hike of tariff by Airtel was done in December last year, then the tariff was hiked by 42%, and this certainly helped them increase their ARPU, and reduce the losses.
Airtel’s arch-rival Jio earned Rs 140.3 ARPU in the same quarter, even as their profits increased to Rs 2250 crore, registering an increase of 180%.
We will keep you updated, as more details come in.