Connect with us

Headlines of the Day

Extracts -Bharti Airtel Q4FY24 earnings call

Gopal Vittal, Managing Director & Chief Executive Officer, Bharti Airtel Limited on the earnings call, after releasing Q4FY24 results

On no visible monetization in sight for 5G.
There is limited monetization on 5G, but see the overall return of the business. All of the capacity investments are going behind 5G. We have stopped investing any capacity investments on 4G, and therefore, the return that the industry really needs is predicated on tariff repair. This is really the heart of the problem that we have today, with our pricing and tariffs at an absurdly low level relative to any other part of the world. Tariff repair is solely needed to improve return ratios. It does not matter which technology it comes from.

5G is a more future-proof technology, so to that extent, it is just about advancing CapEx that would anywhere happen. As far as the overall CapEx is concerned, FY2024 will be an elevated peak level of CapEx, and I expect to see clear moderation going into FY2025.

Prefer to do multiple smaller tariff hikes over a period of time or one or two large tariff hikes
We have done what we could. We have moved up the entry-level tariffs on feature phones. We have tried to drive all the levers of ARPU upgradation across the multiple levers we are using. At the end of the day, it is a competitive market, and repair will need to happen across the industry. The fact is that if competition does not follow, then it will hurt us. That is a challenge. So we just have to wait and see when the time is right.

My own sense is that you will need substantial repair in the industry. We are already at just over Rs. 200 ARPU. The right level of ARPU even at Rs. 300, would still be one of the lowest in the world. So there is substantial repair to be had in the industry. I cannot guess how that happens, but we will see how it plays out.

On the continued decline in ARPU, any signs of the market getting saturated
I would not worry about the ARPU decline because the entry-level plans are slightly lower than the customers who have been with us for a long time because they are on slightly higher price plans and obviously get a lot more value as well. That is the reason for the ARPU drag.

Yes, the home broadband business needs to pick up trajectory. I have no concern at all about saturating penetration or anything of that sort. The combination of the rollout that we are doing, the ability to execute, extract, or get utilization from the rollout coupled with the full-fledged launch of fixed wireless access is what we need to do and get right, and this is really where we are focused.

On incremental capital allocation
One place where capital will continue to be allocated is transport infrastructure. That will require investments for multiple years because of the growth of data and the fact that it impacts all our businesses: home, broadband, B2B, and mobility. We will continue to invest in our enterprise business, our data center business and our wireless on the radio side will moderate with the massive rollout that we did last year both on 5G as well as coverage, and then, of course, homes will continue to get a step up in terms of overall capital allocated. We are looking at potential bolt-on acquisitions in the B2B area. This is an area where some of our adjacency capabilities can get strengthened.

On the SA deployment we have currently got a pilot going on in one state in the country. We are extending this to another circle as well. Many trials are happening to see how this will work out, and the mid-band holdings are a big and very, very priceless part of the overall SA strategy, which is 1800 and 2100 band.

Fixed wireless access we have launched into 25 cities. We all have the outdoor CPE that has been launched in 25 cities. The reason that it will take time for it to scale is the supplies of the CPEs from across the world, some of it are flowing in as we speak. The fine-tuning of some of the customer journeys and then training all our people across the board takes its time. In Q2, you should see the full-scale impact of fixed wireless access.

As of now, we are gearing up to ensure that this velocity increases. This will always be a compliment to fiber where there is fiber obviously will put focus on fiber because experience given the better uplink and downlink and more resilient network that fiber has will always be better than a wireless network. But given the unutilized spectrum on fixed wireless access from 3.5 GHz clearly FWA will be a very good compliment where fiber has not reached.

CT Bureau

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2024 Communications Today

error: Content is protected !!