Bharti Airtel sees demand softening, expects recovery in June

By: |
May 19, 2021 4:30 AM

The Q4 also witnessed increased competitive intensity among the operators to acquire customers. For the enterprise business, the company is “in sourcing” its entire SME sales force, which was earlier outsourced.

The company is targeting to have 20-25 million home broadband customers in the next couple of years.The company is targeting to have 20-25 million home broadband customers in the next couple of years.

Amid the second wave of Covid, the country’s second-largest telecom operator, Bharti Airtel, is feeling some softening of demand with migrants returning home, leading to consolidation of SIMs as well as reduced acquisition of new customers as most of the physical stores are closed.

However, Bharti expects recovery in June. Speaking during the analyst call post the company’s Q4 results, Gopal Vittal, MD and CEO, India and South, said there had been a lot more fear and insecurity during the second wave and 90% India was in full lockdown and there was reduction in economic activity.

“There is financial pressure as migrants go back to villages…consolidation of SIMs and there is reduced acquisition. All these things are having an impact and April has been very soft but like last year, June may witness potential recovery,” Vittal said.

He further said for the time being, the company had been giving emphasis on business connectivity. The company has already announced to give Rs 49-pack free of cost to over 55 million low-income customers. The pack offers a talktime of Rs 38 and 100 MB data with a validity of 28 days. Similar offers have also been made by rivals Reliance Jio and Vodafone Idea to their low-end customers. Last year, too, during the peak of the pandemic, all the telecom operators provided similar offers for their low-end customers as most of the stores for doing recharges were closed.

Asked about the capex plans for FY22, Vittal said it was expected to be in a similar range as has been over the last few years.

In FY21, the capex stood at Rs 19,200 crore. Although the capex amount will remain at the same level but going forward more investments will go towards transport network as well as broadband as the company gears up for 5G. 4G radio capex has begun to moderate. The company is seeing strong traction in its wireline broadband business with over 3 million customers. “During the quarter we expanded our footprint rapidly to new towns and cities through our unique LCO partnership model, adding 1mn+ home passes. We are now present in 200+ cities. As a result, our net adds this quarter at 274K have been the highest ever,” Vittal said.

The company is targeting to have 20-25 million home broadband customers in the next couple of years. Although the company saw its average revenue per user (Arpu) decline marginally to Rs 684 for home broadband, primarily due to the Rs 499-entry level plan, but going forward, it does not expect any further dilution.

The Q4 also witnessed increased competitive intensity among the operators to acquire customers. For the enterprise business, the company is “in sourcing” its entire SME sales force, which was earlier outsourced.

“This will lead to upgradation of our SME channel capabilities helping us gain share. Second, we are building our omni-channel digital capabilities. Today, more than 95% of the new orders for the product lines where we have begun this effort are coming through digital channels,” Vittal said.

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