Amid Mobile Rate War, Companies Vie For Market Share
Bharti Airtel, the telecom major said that the mobile pricelist in the country is at unmaintainable levels nevertheless, the battle in the telecom industry at present is fixated on market share which will continue to put pressure on business. Gopal Vittal, MD and CEO, India & South Asia, said during some earnings call last week that pricing today is at compressed level and that is why the industry is seeing many consolidations in last 12 months.
This level of pricing is very unmaintainable but, at this point of time there is fight for the market share and that is being determined by the new entrant and therefore pricing remains compressed. The largest telecom operator of India, Bharti Airtel forwarded a waning in combined net profit for the seventh straight quarter to Rs. 305.8 crores for the period of three-month which ended December 31, 2017 because of pricelist war in the industry.
Bharti Airtel had registered a net profit of Rs. 503.6 crores a year ago in the same period. The new entrant, Reliance Jio, on the other hand, led to the pricelist war, on Friday posted its first-ever profit at Rs. 504 crores. Mr. Gopal Vittal also said that the clients may be willing to pay Rs. 400–500 but can get the unlimited call and data for Rs. 130 a month.
He also said that they have revenue sitting above this level. This has resulted in average revenue per user erosion and if we look back over the last 3 to 4 quarter, the company is unlikely to see that kind of ARPU erosion going forward. Moreover, the average revenue per user of Airtel in India has declined by 28.6% to Rs. 123 in the quarter from Rs. 172 in the last year and said that Indian telecom market will soon be a three-player market apart from BSNL.