According to Gopal Vittal, managing director and chief executive officer, Bharti Airtel, unlimited free 5G data acts as a headwind against monetising the next-generation technology. He stated that differential pricing for 5G is not prudent because only a fraction of the customers will subscribe to the higher-priced plans.
In Airtel’s earnings call for the third quarter of 2023, Vittal asserted that 5G has no real monetisation on the consumer side. He added that fixed wireless access (FWA) would give some ability for telcos to monetise, but it is modest in the overall scheme of things given the capex spent on 5G. He added that despite working with a few large enterprises for private 5G services, they are still a small part of the overall monetisation and are not meaningful enough. He informed that Airtel is working with a large auto ancillary manufacturer and a handset company in South India, and another big player in industrial equipment in the west to deliver private 5G networks. According to Vittal, monetisation is about overall tariff repair and free 5G data is a headwind on any sort of monetisation.
Further, Vittal noted that Airtel has more than 65 million 5G subscribers. However, the overall contribution of 5G users to the smartphone base is still low at around 15-16 per cent. Vittal expects the industry to have 25 per cent of the base as 5G-enabled by March 2025.
Vittal announced that Airtel will launch its FWA services for factories on the 5G standalone (SA) architecture, which will be different from the non–standalone (NSA) architecture that it currently uses to offer 5G services to consumers. He stated that in the medium term, as more and more traffic shifts from 4G networks to 5G networks, the telco will take its existing spectrum bands and refarm to move to an all-SA network. The company is already in the midst of a trial. He added that trials for SA were being done in a north Indian city with 30 sites.
Regarding the closure of 2G networks in India, Vittal said that 2G contribution to Airtel’s business was about 17 per cent, and in single digits in markets such as Gujarat, Maharashtra, Kerala, Mumbai, and Delhi. He stated that in the next few years, the industry may start seeing a substantial, almost disappearing of 2G.
Additionally, Vittal noted that Airtel does not plan to make additional calls for raising the remainder of Rs 150 billion from its rights issue proceeds, as its free cash flows were healthy. Over the next four to six quarters, the telco will focus on deleveraging, or lowering the debt, the bulk of which was housed in Indian operations and due to the government. This includes spectrum payments and adjusted gross revenue dues.
Vittal said that more sites will be added in five circles—Maharashtra, Gujarat, Chhattisgarh, Kerala and Bengal. He added that two platforms developed internally by Airtel—Airtel Work and omnichannel consumer service – will be replicated in a few countries in Africa where Airtel has its own operations.
