Airtel India CEO Gopal Vittal on Friday revealed the telecom operator’s strategy towards content, growth plans, investment in broadband and the expected increase in the price of mobile services due to ongoing consolidation.
Gopal Vittal during an analyst call on Friday said the price of mobile services in India will start increasing within the next six months in the wake of the recent approval to Vodafone-Idea merger.
All telecom operators reported lower ARPU (average revenue per user per month) in the last few quarters due to hyper competition.
ARPU of Airtel India’s mobile services fell 8.8 percent quarter on quarter and 31.8 percent year on year to INR 105 or $1.6 in the first quarter of 2018-19.
Vodafone India said its contract ARPU fell 20 percent and prepaid ARPU dropped by 28 percent in the first quarter.
Reliance Jio posted an ARPU of Rs 134.5 per month. The ARPU of Reliance Jio, which is offering free voice service, is much better than the ARPU of Airtel India.
Airtel India reported EBITDA of INR 2,760 crore from mobile services business and INR 4,913 crore EBITDA for India telecom business, while Reliance Jio posted EBITDA of INR 3,147 crore.
The DoT approval to the Vodafone-Idea merger will create three big operators in India: Vodafone Idea, Airtel and Reliance Jio. Though Gopal Vittal indicated that the price will stabilise in India, Reliance Jio chief Mukesh Ambani did not give any indication on the possible move to increase wireless tariffs for Jio’s 4G customers.
In fact, Reliance Jio will be entering the fiber broadband business from August competing with market leader BSNL and Airtel. Airtel home broadband ARPU fell 5.4 percent quarter on quarter and 16.2 percent year on year to INR 879 or $13.1 in the first quarter. Airtel added 16,000 high-speed broadband customers in the June quarter of 2018 as against 8,000 users in the same period in 2017.
Airtel is aiming to add 2 million to 2.5 million new home broadband connections this year by making investment in coming quarters. Airtel India’s Capex in broadband business was INR 192 crore (–7 percent), while total Capex was INR 7,866 crore (+22 percent) indicating that the main focus was on ramping up 4G presence.
Gopal Vittal said Airtel is not considering the emergence of JioPhone as the largest selling feature phones in India as a threat to its 4G business. Reliance Jio introduced new feature phones that support 4G services targeting low income families in rural and urban locations across the country.
Airtel is not looking at making huge investment in content business though it wants to ensure for revenue from mobile service business. Globally, big telcos are spending huge funds on entertainment and content business to improve ARPU.
AT&T has acquired Time Wartner for $85 billion. Verizon is investing in content companies like Internet major Yahoo. Reliance Industries (RIL) has a strong entertainment business to support the wireless business of Reliance Jio.
Baburajan K
