Airtel founder compares mobile recharge costs with Pepsi and chips, says tariffs are too low

A bottle of Pepsi, a packet of chips and a mobile recharge. Bharti Airtel founder Sunil Bharti Mittal believes the first two cost consumers more than they should be paying for the third. He has made a case for higher mobile tariffs in India, saying users should be paying an average of Rs 350 every month for telecom services.Mittal's argument is that people have become accustomed to extremely cheap mobile connections, even though their phones now serve as gateways to banking, education, entertainment and several government services. At Rs 350 a month, the cost works out to roughly Rs 10-12 per day, which he believes is reasonable for the range of services users get."You buy now soap and a packet of chips. You know what it costs. Having a bottle of Pepsi costs you a lot more than that," he told PTI in an interview marking 50 years of Bharti Enterprises.He added that mobile users get access to banking, UPI payments, education, direct benefit transfers and health records, apart from entertainment platforms such as Instagram and YouTube. The Rs 350 figure is higher than the Rs 300 monthly average Mittal had previously advocated. He said his earlier estimate was made around 10 years ago and no longer accounts for inflation and the rising cost of running telecom networks. Fuel, electricity, employee salaries and administrative expenses have all become more expensive, he said. But the bigger concern is the amount of infrastructure India still needs to build.Mittal cited the difference between India and China to explain the gap. While China has more than 10 lakh mobile towers, India has approximately 3.5 lakh. According to him, the country needs to at least double its existing tower infrastructure. Expanding fibre connectivity and submarine cable networks will also require substantial spending. There is another financial concern. Telecom companies have invested heavily in 5G, but the returns have not been as strong as expected. Mittal said spectrum purchases cost operators lakhs of crores, while network deployment required another investment of around Rs 1.5 lakh crore. He believes this spending has created the capacity needed for India's digital economy, but operators need better returns to continue investing. He also pointed out that digital businesses benefit from telecom infrastructure without having to make comparable investments themselves.When will the increase happen?As of now, Mittal has not committed to a date for the proposed Rs 350 average monthly revenue per user. Asked when the industry could reach that level, he told PTI, "I don't know." The suggestion comes at a time when the industry is already discussing another round of price increases. The last major revision happened in June 2024, when operators raised tariffs by 10-25 per cent. There have been only three major rounds of increases since 2019.Airtel reported an average revenue per user (ARPU) of Rs 271 for the September quarter, compared with Rs 256 a year earlier. Reaching Rs 350 would mean an increase of roughly 29 per cent from its latest figure.Airtel has also made some changes to its entry-level offerings in recent months. It withdrew certain low-cost plans in August without announcing a general tariff increase, but brought back its Rs 299 prepaid plan this month as its net customer additions slowed.Mittal also stressed that India needs three financially healthy private telecom operators. He described Vodafone Idea and BSNL as being in a challenging position and argued against returning to an era when more than a dozen operators competed in the market, saying that it had hurt investments in network infrastructure.- Ends