Bharti Airtel’s capex in FY18 will remain flattish at $3 billion, of which $2.5 billion will be for the India business, which will be largely spent on strengthening and expanding its 4G network. In FY17, Bharti’s capex was at $2.96 billion, the bulk of which was for the India business.
The company’s CEO and managing director for India and South Asia, Gopal Vittal, said in an analyst call on Wednesday that capex on 2G and 3G networks will be almost negligible. “In the next 12-15 months, at a time when the industry is consolidating, is at a churn and there is lot of uncertainty, we believe this is a once in a life time opportunity for us to accelerate our market share,” Vittal said.
“In the coming 12 months, a very substantial part of our capex will only be towards fibre and 4G. Capex going behind 2G and 3G will be almost negligible,” Vittal added. He said that the data business would grow in the times to come but due to competitive pressure there would be financial stress in the short term.
For Bharti, the positive side in its earnings that was announced on Tuesday is that while data realisation dropped by a huge 32.1% sequentially, usage also jumped massively at 36.9%. It was also able to increase its data subscriber and lower churn.
“This is still a market which has over a billion customers and with a total smartphone penetration sitting at about 242-250 million, and what you are likely to see over the next three years is that the number will go up to maybe 600-700 million and that has a real big impact on the way data growth will take place,” Vittal said.
On the government’s move to set up an inter-ministerial committee to look into the financial health of the telecom sector, Vittal hoped that taxes and licence fee would be rationalised for the sector.