Airtel will increase its mobile tariffs for prepaid plans from November 26, the company has announced in a press release. The revised prices indicate that the tariffs for all prepaid plans are being increased by 20-25%. "Airtel has always maintained that the mobile Average Revenue Per User (ARPU) needs to be at Rs 200 and ultimately at Rs 300, so as to provide a reasonable return on capital that allows for a financially healthy business model." - Airtel Press Release The telecom sector in India has been struggling with debt issues due to nearly half a decade of competitive pricing. Reports suggest an industry-wide consensus to raise telecom prices, thereby increasing the cost of internet access in India. Why is Airtel increasing tariffs? In the press release, the company said that higher tariffs were required to support the networks and spectrum, and to give the company "the elbow room to roll out 5G in India." Before the tariff hike, the company also conducted a rights issue to raise capital. Airtel Chairman Sunil Mittal explained why Airtel needed capital on the investor call: Government levies: Mittal bemoaned the lack of government support to the industry as 35% of telecom revenues is earmarked for government levies. “We expect the government to respond by having lighter touch regulations and making life simple for telecom companies. The levies are far too high,” Mittal urged. 5G rollout: The company is also in need of capital for the upcoming 5G auction. Mittal claimed that 5G will become a…
