Airtel India CEO Gopal Vittal and global CFO Nilanjan Roy have revealed the telecom operator’s investment strategy, 4G spectrum plans, refarming, data pricing, etc during the Q4 earnings call on May 10.
The discussion with telecom sector analysts indicates that the telecom company is optimistic about further enhancing wireless share in a market, which is in the process of undergoing consolidation, and gaining control over Opex.
Leading telecom operators including Bharti Airtel are facing the task of making investment in mobile data networks at a time when financial lenders are talking about poor debt conditions of telecoms. Lenders have a debt exposure of more than Rs 450,000 crore to Indian telecom industry.
Spectrum
The proposed acquisitions of Telenor and Tikona, Airtel will have the highest data spectrum capacity per site in the Indian telecom industry. Post completion of the deal with Tikona, Airtel will have spectrum in 2300 MHz band across all telecom circles.
As part of the deal with Telenor, Airtel will acquire Telenor India’s operations in seven circles. With this, Airtel will add 43.4 MHz LTEready spectrum in the 1800 MHz band, augmenting its overall customer base and network.
Refarming
Airtel will be considering refarming of some spectrum in one or two cities to 4G in the second half of the current fiscal. “If voice traffic on 2G network is falling beyond our threshold, we will immediately start looking at refarming. My estimate is that that number will be breached towards the back half of this year so as we look at FY2018 and FY2019, we will certainly have refarmed a bunch of spectrum in some of the key cities,” Gopal Vittal said.
Investment
During the fourth quarter Airtel has invested Rs 28.5 billion in India adding nearly 20,000 mobile broadband base stations in India.
With the addition of Telenor and Tikona’s spectrum, Airtel will have 126 3G+4G carriers. Airtel said its Capex spend will be nearly $3 billion across both geographies to create additional data capacities in light of increased data usage in the country.
The Capex of Airtel will only be towards fiber and 4G in the next coming 12 months. The Capex going in behind 2G and 3G will be almost negligible.
“To grow both coverage and capacity along with keeping a close watch on Capex efficiency and productivity, our Capex guidance for FY 2018 stands similar to FY 2017 spends at nearly $3 billion,” Gopal Vittal said.
Airtel added ~3.1 million mobile broadband data subscribers in the first two months of the calendar year as per TRAI, while the rest of the operators with paying customers lost 3G+4G subscribers. Despite free offers from Jio, data usage on Airtel network increased 53.4 percent and data usage per customer crossed 1.3GB for the first time. Data ARPU, however, declined 17 percent.
Opex
Gopal Vittal said Opex will be a very big area of focus.
Broadband business
V-Fiber broadband has enabled Bharti Airtel to deliver 40 mbps broadband speed. It has connected almost 1.7 million homes to V-Fiber. “We are in the process of ironing out supply chain issues and acquiring modems in order to upgrade most of our customers on to 40mbps in the next few months. We are looking at leveraging wireless technologies to deliver cheaper broadband to the home,” Gopal Vittal said.
