Airtel considers growth in ARPU as main source of 5G monetisation

Bharti Airtel Managing Director Gopal Vittal while speaking at a JP Morgan Investor Summit said that the telco considers growth in average revenue per user (ARPU) through tariff hikes as its main source of 5G monetisation in the near term. He also did not appear worried regarding consumer acceptance, terming telecom as an essential service.

He added that Airtel’s 5G services from October would be at par with its peers in quality and timeliness. However, he admitted that Airtel would have preferred to defer its 5G rollouts by at least a year as penetration of compatible 5G handsets is still low and the monetisation of consumer and enterprise use cases will take time to evolve.

“Vittal believes that the industry price repair is unfinished and needed for 5G monetisation and ROCE (return on capital employed) recovery and he is not concerned about the acceptance of consumers for another price hike in a rising inflation environment, given that telecom is an essential service,” JP Morgan stated in a note.

Sunil Mittal-led Airtel expects to cover all of urban India by the end of 2023. Airtel, which bought 5G airwaves worth Rs 43,084 crore in the recent telecom spectrum auction, plans to offer 5G data speeds up to 30 times faster than 4G.

Experts are also talking about telco’s early edge over Jio as its version of its 5G rollout using the non-standalone (NSA) model is better evolved as over 90 per cent of global 5G traffic runs on such networks.

Bharti Airtel shares ended 2.04 per cent lower at Rs 755.20 apiece at the BSE on Monday. BusinessWorld