 "Customers should ideally pay more for higher usage: Airtel MD Gopal Vittal")
Bharti Airtel is seeing improved customer engagement with rollout of 5G service but pricing remains a challenge, the company's managing director Gopal Vittal said on Wednesday.
Ideally customers should pay more for higher usage, he added while highlighting the flaws in Indian telecom industry pricing structure.
Airtel, which posted nearly 50 per cent year on year jump in consolidated net profit in fourth quarter FY 2024, launched commercial 5G service last October. The company posted a Rs 3,006 crore consolidated net profit in Q4FY23 compared to Rs 2,008 crore in the year-ago period.
Currently the 5G service is available in over 3,000 cities and the company hopes to extend it to all major towns by year end.
Vittal said the company is seeing lower customer churn and an increase in data consumption with the launch of 5G service. These will benefit average revenue per user as the number of 5G enabled handsets grow from current 10-11 per cent.
Vittal said pricing however remains a challenge with India having the lowest rates for data packs on per GB basis in the world.
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Indian telecom industry's pricing structure is broken with adoption of one size fits all pricing model. " In a consumer industry you would typically have people who are able to pay more get more (allowance or services)..people who pay less get a lot less....There is no reason for them to buy higher plan unless they are unique users. So it is not the right price architecture which we need in a market like India...," Vittal added.
Vittal said the company remains financially strong and expects to generate enough cash flows to meet its capex and debt repayment requirements.
Enhanced focus on cost control is also helping the company lower operating expenses. This includes reduction in expenses related to network, sales and end to all 4G-capacity investment.