Adding Premium Users a Key Challenge: Vittal
Airtel MD says the price of 700 MHz waves is high and unaffordable
Kolkata: Bharti Airtel’s data penetration has flattened nationally over the past few months, and a key challenge going forward would be attracting new subscribers to its premium mobile broadband services in a fiercely competitive market, Gopal Vittal, managing director, India & South Asia, has said.
Vittal on Thursday reiterated that the recommended base price of 4G airwaves in the coveted 700 Mhz band — .₹ 11,485 crore a unit of pan-India spectrum — was “very high and unaffordable”, especially since bulk of “Bharti Airtel’s spectrum needs had been met,” following its recent 4G airwave acquisitions from Videocon and Aircel. However, he indicated the market leader is open to boosting 3G spectrum holdings in the next auction, especially in markets like Kerala where it still does not have 3G airwaves. He was participating in an earnings call a day after the Sunil Mittal-led telco reported a 2.8% rise in net profit to .₹ 1,290 crore in the fiscal fourth quarter. His concerns regarding the “flattening of data penetration” come at a time when Bharti Airtel has seen a sequential dip in both average data realisation per MB (ARMB) and data average revenue per user in the January-March quarter. Also, revenue from data as a proportion to mobile services increased modestly to 23.3% from 23.1% in the previous quarter.
Vittal said that India’s No 1 mobile operator would expedite steps to “boost internet literacy” at the consumer level and also engage more aggressively with content providers to boost appetite and grow data penetration levels nationally. His comments assume importance in the lead up to Reliance Jio Infocomm’s much awaited launch, especially since incumbent carriers such as Bharti Airtel are trying to wrest as many highend data customers as possible before the Mukesh Ambani-led telco’s 4G services go live commercially. Morgan Stanley warned that data ARMBs could fall further amid rising competition, especially once Jio launches. “Voice tariff hikes could be tough and incumbents also face the risk of data cannibalizing voice as well as margin pressure, with rising competitive intensity,” said the US brokerage.
However, Vittal is upbeat about the rising appetite for 4G services with the advent of devices at compelling price-points. “We’re clearly seeing traction on the 4G front with a wealth of compatible devices now available at the affordable .₹ 5K to 6K range, coupled with the rising data flow through on our 4G network,” he said.
Bharti Airtel is also exploring ways to raise voice realisations in the context of the current competitive dynamics. “We will to do this by driving quality customer acquisitions and also keeping a tight check on churn.”
The company’s global finance head Nilanjan Roy said the capex guidance for FY17 would be $3 billion, of which $2.2 billion would be earmarked for India and South Asia, remaining $800 million for Africa. In November 2015, the telco earmarked .₹ 60,000 crore for network transformation and expansion under ‘Project Leap’ for a three-year program.