Airtel hangs up on low spenders amid Jio war

NEWDELHI: Bharti Airtel Ltd has decided that ultra lowspending customers, those that buy recharge packs costing less than ₹35 a month, are just not worth the trouble, as India’s second-largest telecom operator charts out a new strategy to take on rival Reliance Jio Infocomm Ltd, which brought industry tariffs to rock bottom.

The New Delhi-based company believes such a step will reduce the number of marginal customers, rein in selling, general and administrative expenses and help focus attention on improving services to better-paying users.

Analysts say redrawing its strategy could work well for Bharti Airtel, which has seen revenue and profitability decline in the past two years due to intense competition. During July-september, its net profit plunged 65% from a year earlier to ₹119 crore, while revenue from the India business fell 3.6% to ₹14,920 crore. “We have about 330-odd million customers in wireless. But if you look at the pattern of consumption... about 100 million customers have very low levels of Arpu (average revenue per user),” Bharti Airtel’s chief executive, Gopal Vittal, said on Friday in a postearnings conference call with investors. “So these Arpus are at sort of low double digit... In the last one and a half months in three circles in Tamil Nadu, Uttar Pradesh west and Punjab, we’ve introduced minimum Arpu-led plans at the low end... We’ve seen some good results in and we’re now rolling it just now across the country, in fact in the last seven days we have already rolled out across the country.” According to data for April-june compiled by the Telecom Regulatory Authority of India, Bharti Airtel holds the highest share of the rural subscriber base. Its market share stands at 33.44%, while rival Jio holds 12.22% share. The picture is starkly different in the total wireless internet subscriber base, where Airtel holds 25.3% share while Jio has captured 43.8% share.

An emailed query to Bharti Airtel for details of the revenue break-up from rural and urban regions was unanswered till press time.