India’s second-largest telecom operator Bharti Airtel is well capitalised to fund its future investment needs through internal accruals, its chairman Sunil Bharti Mittal said in the Annual Report of FY23.
Statement from Mittal is crucial at a time when the telecom operator is increasing its capital expenditure to rollout 5G networks. Owing to faster rollout of 5G services, Airtel is front loading its 5G capex and for FY24 it is expected to spend 28,000-31,000 for 5G rollout, transport infrastructure, broadband rollout, and data centers.
“Strong operating free cashflows amid accelerated investments on 5G and rural rollout supported the company’s debt reduction in FY 2022-23. It took a prudent decision to make an upfront payment for the 5G spectrum acquired in August 2022 and availed four years of moratorium,” Mittal said.
Airtel’s net debt at the end of April-June quarter was at Rs 2.08 trillion, less that Rs 2.13 trillion at the end of January-March quarter.
In the last financial year ended March, Airtel acquired 5G spectrum worth Rs 40,000 crore. The company said to make an upfront payment to the government, it utilised a combination
of business cash generation, proceeds from Google’s investment and lower-cost debt, totalling over Rs 8,300 crore.
Airtel CEO Gopal Vittal said, “As we look ahead, our strategy remains simple and consistent. Focus on winning quality customers and be obsessed about improving customer experience.”
The company is targeting to cover all urban areas and some key villages with 5G by March 2024. “We are also working with our ecosystem partners to bring new 5G use cases to enterprise customers. A key priority for us is to expand our footprint in rural areas where we are not present,” Vittal added.
Interestingly, Vittal’s gross annual remuneration for FY23 was at Rs 16.84 crore, higher than that of Mittal at Rs 16.77 crore, as there has been no change in the latter’s annual salary and allowance, according to the annual report.