Bharti sees potential for upside in ARPUs from VAS, internet -Governance Now

Bharti sees potential for upside in ARPUs from VAS, internet

Expansion in the consumption on the VAS side and accelerated adoption of mobile internet on both 2G and 3G to drive the upward movement

PTI | August 23, 2011

Telecom operator Bharti airtel on Monday said it sees significant potential for an upside in average revenue per user, a key metric for telecom carriers, on account of rapid growth in consumption of value-added services and the use of mobile internet.

"We firmly believe that there is a significant potential in average revenue per user (ARPU) upside, resulting from an expansion in the consumption on the VAS side and accelerated adoption of mobile internet on both 2G and 3G," a Bharti airtel spokesperson said.

ARPU is commonly used by telecom operators to estimate the return on investment (ROI) in network infrastructure and end-user services. The telecom industry is feeling the pinch, as ARPUs have been declining sequentially due to the low tariff regime and high incremental costs.

For the quarter ended June 30, 2011, monthly average revenue per user (ARPU) from Bharti's Indian operations fell by 12 per cent to Rs 190 for the quarter. On a quarter-on-quarter basis, the average revenue per user (ARPU) of the company stood at Rs 190 on June 30, 2011, down 2 per cent from Rs 194 in the previous year.

Recently, Bharti airtel increased tariffs by a minimum of 20 per cent on a few of the service packs it offers. The country's largest telecom firm, Bharti airtel, posted a 28 per cent fall in consolidated net profit to Rs 1,215.2 crore for the three months ended June, 2011, mainly due to higher interest outgo and 3G costs.

The company has launched 3G services in all 13 of its licenced circles. In addition, it has agreements in place with other quality operators for providing 3G services in non-licenced circles. "So with this (arrangement), the company is now providing 3G services across all circles in India, except Punjab and Orissa," the spokesperson said.

As per Trai data for June, every fourth active mobile connection is on airtel's network. This is as per the latest VLR. or visitor location register, data, which provides information on the total number of active users.

Replying to a query on airtel's rural subscriber base and the measures taken by the company to increase penetration, the Bharti spokesperson said that currently, about 40 per cent of airtel's subscriber base is rural users.

"In order to expand in the rural areas, the company has also joined hands with Indian Farmers Fertiliser Cooperative Limited (IFFCO) for a joint venture company, IFFCO Kisan Sanchar Limited (IKSL), to add value to the farm sector and empower the rural farmer by giving him access to vital information."

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