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Moratorium has accelerated the need for a tariff hike: Sunil Bharti Mittal

“Which other industry — be it fertilisers, refineries or steel industry spends Rs 20,000 plus crore on its capex every year? None. And then, I am not even adding the spectrum which is another burden that comes every one, two, three years,” says Sunil Bharti Mittal, Chairman, Bharti .

You have said you will not lose your competitive edge and have also talked about increasing revenue market share. Is that a signal you are sending that you are going to continue this practice of tweaking tariffs but not take a bold step like a tariff hike?
Well it depends on the definition of bold. I would say we were at Rs 204 ARPU before Jio came in 2016 September. At that time, the consumption of data was less than one gigabyte a month. It was more like 850 MB. Today our ARPU is less than Rs 150 and the consumption is 16, 17 gigabytes a month. So the deal that has to be there for the customers is that they must enjoy the data that they are used to now — 16, 17, 18 gigabytes. Can we just go back to where we were in 2016 when they were consuming one-sixteenth or one-twentieth of what they are consuming today?

In real terms after five years, spending Rs 200 means is equivalent to spending Rs 160, 170 earlier. So that is all we are looking at. So that much we have to get to. Without that, we will be in either negative or low IRRs for the industry and that is not acceptable for an industry, which has massive capital expenditure. Which other industry — be it fertilisers, refineries or steel industry spends Rs 20,000 plus crore on its capex every year ? None. And then, I am not even adding the spectrum which is another burden that comes every one, two, three years.

5G will move to 6G, more digital requirements will come through, more data will be required centrally. One needs to generate capital and after 25 years, one needs to give something back to the shareholders. So, it needs to get to the right level. My desirable level is Rs 300; that will be bold. We are not anywhere close to it but to get to Rs 200 will be a very justified approach to tariff hike.

With the moratorium coming in, has it deferred the need for a tariff hike?
I think it has accelerated it. All these reforms without a viable sustainable tariff regime could come to a naught. According to me, both have to work.

When you say that you need reasonable 5G pricing, what is reasonable according to you?
As I said right in the beginning, it is hard for me to give a number but let us just go back. It is important that I mention this; 5 megahertz does nothing for you. In the 700 band, 5 megahertz was priced at Rs 56,000 crore all India. Now when we said that is absolutely insane, that it is a wrong recommendation and it should have been scrapped right in the beginning, no one listened to us. Finally, it went out for auction and nobody bid for it. The spectrum was lying unused for all these six, seven, eight years, when it could have been put to use for the customers.

The price on its own arbitrarily without any reason dropped to around Rs 40,000 crore; still there were no takers. Then it was at Rs 30,000 odd crores and still there were no takers. Let us not go on this path of not enjoying the benefits of a very high quality spectrum for the customer and just keep on delaying it. Get the right price. There are ARPUs, there are revenue pools, there are models that TRAI runs very well. They should run those models and see where it fits in.

Do not take too much upfront from the networks and so they cannot invest into the capex. I do not know the number but it has to be reasonable.

When you say that you could also avail the moratorium and the benefits of it could be to reduce debt, can you give any guidance on that front?

Yes. We have very small public market debts which are bonds and some bank debt, which is actually very small. We may want to clean up some of those obligations with the moratorium money but largely, it is going to be directed towards building out accelerated networks.

You say the industry needs to come together and there’s no point creating pointless infrastructure. We need to bring manufacturing back home that we have lost to China, Indonesia etc. Will Airtel alone or in collaboration with anyone look at manufacturing?
No, we are not a company which will be able to manufacture anything. We are users, not producers of technology. We are a very important element of it. If a network in the Airtel scale can be built by some new age network infrastructure providers preferably Indian, that could become the global benchmark. Our networks are large in scale. These are not Mickey Mouse networks. If one Airtel new 5G network from a new network provider works, that could change the world, that could be a new thing created out of India.

You are turning 64 next year. What is that next chapter? We know about OneWeb. Is that what you were alluding to?

No, OneWeb is actually more of the same. It is a telecom network in space. I am enjoying that. It’s a new area I am learning every day. We had the launch of 34 satellites the day before yesterday. Things are progressing well there. So it has been a joy building that company during the pandemic; everything worked on a virtual basis. I never met anybody. The first time I met the CEO of the company was only a couple of months back. It has been good to see that one is not rusted and we can put things together. So what can I put myself to use? It has got to be something in India. A lot of conversations are going on in the infrastructure pipeline projects. We will focus on something. We will do something new in a few years time, pick up a strong big bet and hopefully give time to that.


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