New Delhi [India], May 30 : Prime Minister Narendra Modi's assurance to Bharti Airtel Chairman Sunil Bharti Mittal about the government's neutrality in the telecom sector, in a September 2018 meeting, proved to be a significant turning point for the revival of the Indian telecom major, the latter said in an interview with the Economic Times.
In an interview with the business daily published on Thursday, Mittal said that Airtel's USD 100 billion market cap reflects India's stable economy under a solid leader.
When Reliance Jio was launched in 2016, with free voice and data services, other players in the sector came under stress. Ebidta started crashing and all telecom companies were forced to cut tariffs, which was unsustainable. Three companies went to the National Company Law Tribunal (NCLT).
Mittal said in such a situation, he sought a meeting with PM Modi as an operator and also as Chairman of GSMA.
"I told PM Modi that the situation is very alarming, "I will fight in the market place, but I can't fight the government," Mittal recalled.
Mittal said the PM replied, "The government will not tilt towards either side. Whatever is good for the country will be done. You fight in the market ...I don't have a view on that. But from the side of the government, you can be sure that the government will not take sides."
Mittal further said, that was enough for him and he got up and thanked the PM and this was the turning point for Airtel.
"Sometimes you need inspiration, I needed that, there was a very strong message from the PM to fight in the market," he said.
Mittal said he started looking at the business from a different perspective within existing regulations. "Maybe lower tariffs were better for it politically; lower tariffs were better to democratise the data services. You start to see things in a different context, because you are reassured that there is no agenda here".
And that was the turning point for Airtel, from a market cap of USD 19 billion in 2019, Airtel added over USD 80 billion to its market cap in the last five years.
He further said "And to my mind a lot of statements that this government is only favouring a few are all absolutely misplaced. To my mind this USD 100 billion market cap is a testimony to what India is today, not just my company"
"Money is pouring into this country, a lot of capital is coming in. These massive valuations are a function of stable, solid, functional economy under a very sold leader" he added.
Mittal, said Airtel is the first, first generation company to cross the market cap of USD 100 billion on May 27, 2024.
In his interview with Economic Times, Mittal also raised the concerns of the telecom sector. He indicated that soon there will be tariff hike "We need to have an ARPU (Average Revenue Per User) of Rs 300. Below this, the balance sheet will not be strong to fully serve the digital vision of India. We are at Rs 200 now, it needs to go up. The timing of the hike depends on the market."
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