According to him, telecom companies do not need large tariff hikes because the conversion of tariff increases into higher average revenue per user (ARPU) has been strong in recent years.
Even without a tariff hike, operators are seeing revenue growth as more subscribers upgrade to higher-value plans and move to faster networks. Malhotra estimates that average revenue per user (ARPU) can continue to rise by around 4–5% annually through premiumisation alone. “It’s actually around 4% to 5%,” he said, referring to the organic increase in ARPU from customers shifting to more expensive plans.
Also Read | Bharti AirtelOn Bharti Airtel, Malhotra believes recent developments suggest that a long-awaited debt raise could be close. The government’s support for adjusted gross revenue (AGR) dues, fresh promoter funding, Kumar Mangalam Birla’s return as chairman and a recent rating exercise all point in the same direction. In his view, the company has largely completed the steps lenders would typically want to see before extending financing.
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He was more cautious about reports that Airtel Money could eventually be valued at around $10 billion through a potential initial public offering (IPO). While such a valuation may appear sizeable, Malhotra said investors should view it in the context of Bharti Airtel’s much larger market capitalisation. He added that Airtel’s lending business is still in its early stages and would need to scale significantly before becoming a meaningful source of value creation for shareholders.
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