‘ARPUs need to double by 2021 for sustainable telecom industry’

With the telecom sector in deep financial stress and for the requirement for making fresh investments in technology and infrastructure, average revenue per user (ARPU) of telecom service providers needs to double to Rs 300 by the end of 2021, according to the Director General of the Cellular Operators Association of India (COAI), Rajan Mathews.

Currently, the ARPUs of telcos stand around Rs 150. The rise in ARPU would mean further rise in tariffs for the consumers.

Speaking to IANS, Mathews said that the whole burden of rise in ARPU is unlikely to come on the individual subscribers as enterprises form a major part of the telcos’ business now.

He expressed hope that post the pandemic enterprises will be adopting a lot more mobility-based applications and solutions.

“We need to get about Rs 200 ARPU by the end of this year. We are right now at about Rs 150 ARPU. In order to continue to allow the industry to invest in our networks and keep it up and running, We need to be at Rs 300 ARPU by the end of the next year,” he said.

The telecom sector veteran also said that although the tariffs increase to double ARPU in over year’s time, they will still be affordable compared to the money an Indian had to spend on phone bills and recharges around 5 years ago.

Citing a COAI survey, Mathews said that five years ago, the average annual income of an Indian was about $1,500, and he spent about sixth or seventh of their total income on their telecom services. While, the average annual income now stands at around $2,600 and a person spends less than 1 per cent on his phone bills and recharges.

“Even if it doubles it would still be below the levels people were spending five years ago,” he said.

Telcos have been seeking an early decision from the Telecom Regulatory Authority of India (TRAI) on the floor price on tariffs. The regulator has said that discussion on floor prices would be made after “normalcy” returns.

Mathews told IANS that he is hopeful the decision would be made by the end of this month as the economy emerges out of the lockdown.