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Bharti chairman Sunil Mittal is of the view that the Indian telecom market can certainly support four players. In an interview to ETMarkets, Mittal spoke about a range of issues related to the Indian telecom industry, Indian economy and more.
Talking about rival Vodafone’s plans to raise capital, he said that he wishes them well. “Well, we have four active players, including BSNL, three private and one public sector.Vodafone still has a meaningful share of 15%. We heard that they have plans to raise more capital. I really wish them well,” said Mittal.
Talking about the number of telecom players in the Indian market, Mittal said, “India is a large market. It is 1.5 billion people. It can certainly support three plus one, but in the event we get down to a lesser number for any reason, I think there are two now very strong operators who are building digital highways to serve India’s dreams.”
Mittal was also quite emphatic about the need of ARPUs (Average Revenue Per User) in the telecom sector to improve. Average Revenue Per User or ARPU is the metric that measures the earnings generated per user.
India has lowest ARPU
He said that India has one of the lowest ARPUs in the world and that needs to improve for the industry to be healthy. “…if you really look at it, the worldwide ARPUs are significantly higher. We are talking about India at $2.2 now. At Rs 300, it would probably mean $3.5, even in the Southeast Asian countries whether it is Philippines, Indonesia, Thailand which are at similar economic levels, the ARPUs are $12, $15, $16. So, we need to get to a much higher level eventually,” he said.
“So, Rs 300 is the number that we need now, but the industry should keep pace with the inflationary pressures that it has on the cost of rental for towers, fuel, employment costs, administrative costs, etc, etc. So, everything is becoming very expensive, but let us first get to the Rs 300 which has been a position that I espoused six-seven years back and we are still only two-third of the journey,” he added.
He stressed that it is crucial for the telecom industry to be healthy. “My view is this industry has seen a lot of players ease out. From 12 operators, we are now down to three plus one. So, I would say now is the time to ensure that the sector is healthy, vibrant and has enough return on capital that is deployed and keeps on rolling out India’s dream of being a leading country in the digital space,” said Mittal.
Talking about rival Vodafone’s plans to raise capital, he said that he wishes them well. “Well, we have four active players, including BSNL, three private and one public sector.Vodafone still has a meaningful share of 15%. We heard that they have plans to raise more capital. I really wish them well,” said Mittal.
Talking about the number of telecom players in the Indian market, Mittal said, “India is a large market. It is 1.5 billion people. It can certainly support three plus one, but in the event we get down to a lesser number for any reason, I think there are two now very strong operators who are building digital highways to serve India’s dreams.”
Mittal was also quite emphatic about the need of ARPUs (Average Revenue Per User) in the telecom sector to improve. Average Revenue Per User or ARPU is the metric that measures the earnings generated per user.
India has lowest ARPU
He said that India has one of the lowest ARPUs in the world and that needs to improve for the industry to be healthy. “…if you really look at it, the worldwide ARPUs are significantly higher. We are talking about India at $2.2 now. At Rs 300, it would probably mean $3.5, even in the Southeast Asian countries whether it is Philippines, Indonesia, Thailand which are at similar economic levels, the ARPUs are $12, $15, $16. So, we need to get to a much higher level eventually,” he said.
“So, Rs 300 is the number that we need now, but the industry should keep pace with the inflationary pressures that it has on the cost of rental for towers, fuel, employment costs, administrative costs, etc, etc. So, everything is becoming very expensive, but let us first get to the Rs 300 which has been a position that I espoused six-seven years back and we are still only two-third of the journey,” he added.
He stressed that it is crucial for the telecom industry to be healthy. “My view is this industry has seen a lot of players ease out. From 12 operators, we are now down to three plus one. So, I would say now is the time to ensure that the sector is healthy, vibrant and has enough return on capital that is deployed and keeps on rolling out India’s dream of being a leading country in the digital space,” said Mittal.
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