Airtel 5G to be offered only on higher tariff plans: report

Days after Airtel’s CEO revealed plans to roll out 5G in India this month with 5,000 towers; the company’s vice-chairman, Akhil Gupta, in an interview with mint, said: ‘Airtel might not charge a premium for its 5G service but may offer it to users of high-priced tariff plans,’ to make users upgrade to the superfast network as data consumption rises. This will make it much easier for Airtel to quickly reach its higher average revenue per user (ARPU) milestone.

Airtel’s ARPU was Rs 183 at the end of Q1 FY23. With another pricing increase and more expensive 5G plans, the company would easily surpass the Rs 200 mark, given that it already has the highest ARPU in the industry.

Telcos have stated that after increasing prepaid rates by 20 to 25 percent in November, they will hike the price again this year. In the medium run, telcos intend to hike ARPU to around Rs 300 to 350. Even with the price increases, India’s tariffs will still be far lower than in Western markets.

Further, Gupta said that 5G, like earlier and even more advanced technologies, will be driven by supply, with customers consuming more data as faster internet becomes more widely available, leading to higher income for telecoms. According to Gupta, since additional tower infrastructure is required for network rollouts, 5G would significantly boost the growth potential of tower firms.

Regarding the requirement to utilise non-Chinese equipment, Gupta stated that when it came to national security, the law of the land must be upheld, even though Chinese players aided Airtel’s growth in its early years by providing it with affordable equipment.

Meanwhile, Reliance Jio also revealed plans for the 5G launch in India, check details here.