Airtel India CEO Gopal Vittal has indicated that telecom operator will maintain its Capex (capital expenditure) during the current fiscal in line with the previous years.
Airtel’s Capex touched Rs 19,200 crore during fiscal 2020-21. Airtel did not reveal its specific target for network spending.
Airtel will be spending towards transport network as well as broadband as the company gears up for 5G in the coming years. 4G radio capex of Airtel has begun to moderate.
Airtel India had 216,901 network towers in Q4 fiscal 2021 vs 194,409 network towers in the same quarter last year. Airtel has 215,801 mobile broadband towers.
Airtel India had 606,783 mobile broadband base stations as compared to 503,883 mobile broadband base stations at the end of the corresponding quarter last year and 568,345 at the end of the previous quarter.
The second largest telecom operator in India is seeing strong traction in its wireline broadband business with over 3 million customers.
Airtel’s broadband coverage reached 200 + cities. Airtel added 274,000 new broadband customers during the recent quarter. “We expanded our broadband footprint to new towns and cities through our unique LCO partnership model, adding 1 million + home passes,” Gopal Vittal said.
The company is targeting to have 20-25 million home broadband customers in the next couple of years. Airtel’s average revenue per user (ARPU) declined marginally to Rs 684 for home broadband, primarily due to the Rs 499-entry level plan.
Airtel is currently building digital capabilities to enhance customer experience. “Today, more than 95 percent of the new orders for the product lines where we have begun this effort are coming through digital channels,” Gopal Vittal said.
Capex has passed its peak and will be at similar levels going forward, but the composition will change to Transport and non-Wireless (broadband), while 4G radio capex will reduce, Motilal Oswal Institutional Equities said.
Focus on the non-Wireless business (Home and Enterprise) is expected to drive strong growth, with aggressive additions in Home passes and higher market share (widening client base and increasing wallet share) in the Enterprise business.
Airtel’s superior execution quality is reflected in its strong performance in the last four quarters, market share gains, 13% subscriber growth, and 32% growth in 4G subscribers (~4m monthly). ARPU improved 7% in the last four quarters without a tariff hike.
During the spectrum auction in March 2021, Airtel has acquired 355MHz of spectrum for INR187b and now holds sub-GHz spectrum across circles. This is expected to improve network coverage and help tap additional 90 million subscribers in remote areas.
