According to Gopal Vittal, managing director (MD) and chief executive officer (CEO), Bharti Airtel, the telco is poised to pull ahead and take a further lead, particularly in the postpaid segment which has a higher share of premium customers, by taking a short-term advantage of the financially pressed situation of one of the players in the industry. He added that the addition of 300,000 postpaid users in the second quarter of the fiscal year 2022 had made the telco a decisive leader in the higher revenue-generating segment.
In Airtel’s earnings call for the second quarter of 2022, Vittal said that pricing in general needs to rise quickly as the return on capital employed of Airtel’s India and South Asia business remains very low at 8.4 per cent. He explained that the only way to remedy the situation is a tariff correction. However, he informed that the telco will keep 5G and 4G tariffs at the same levels for another six to nine months, after which it may decide on fixing 5G tariffs separately. However, he reiterated the need for existing tariff levels to rise. He also flagged that countries such as the US, Thailand and South Korea, which had priced 5G differently from 4G saw very little uptake of 5G services, with only a fraction of customers of local telcos opting for the premium 5G plans.
Further, Vittal said that the operator was aiming to fill up its 5G capacity over time and then refarm the 4G spectrum to use it for 5G as well, backing Airtel’s strategy of keeping 4G and 5G tariffs the same. He added that Airtel had started testing standalone 5G technology architecture which would be applicable to enterprise use cases.
Vittal also stated that the telco would expand its rural area coverage by deploying low-cost sites, which will help it gain market share profitably. He informed that over 40 per cent of industry 4G net adds come from rural areas and the time is right to bridge a substantial part of the coverage gap in mobile against the leading player in the industry, adding that the carrier had developed data science models to determine deployment and sent teams to determine areas of opportunity.
