Bharti Airtel, the country’s largest telecom service provider, has earmarked $3 billion (Rs 18,900 crore) for its FY16 capital expenditure programme, senior company officials told analysts on Wednesday.
Of the total amount, about $800 million (Rs 5,040 crore) will be used to spruce up African operations, where the company has lost significant market share in the last few quarters. The rest ($2.2 billion) will be used to grow its operations in Asia, the chunk of which will be dedicated to India where it is looking to strengthen voice services and grow its data user base.
The allocated capex figures, however, don’t include the spend on renewing spectrum in Nigeria, auctions for which are slated in coming quarters.
“We will review the capex after reaching the half-year stage and evaluate if it is to be increased further,” Bharti Airtel’s managing director and chief executive (India and South Asia) Gopal Vittal said.
Bharti Airtel, which reported its January-March quarter earnings on Tuesday, saw net profit miss estimates with a 12.7% sequential decline to Rs 1,255 crore. Revenues also lagged forecast at Rs 23,016 crore, down 0.87% compared to the preceding quarter.
Some key operational parameters, including average revenue per user (Arpu) and average revenue per minute (ARPM) for voice services, also took a beating.
Vittal attributed the decline in voice ARPM to the 8.8 million customers the company acquired during the recently concluded quarter, a large number of whom joined at a lower tariff rate compared to the existing customers.
“We will need to improve our pricing in a sustainable and profitable way,” Vittal added.
Bharti Airtel, which made a commitment of Rs 29,130 crore in the recently concluded spectrum auctions, currently has spectrum to provide 3g services in most parts of the country. Its 3G spectrum holding increased to 19 of the 22 telecom zones after the auctions, where it also acquired additional spectrum in the 900 MHz band in Karnataka, Andhra Pradesh, Punjab, Himachal Pradesh, North East, Assam, Bihar and Orissa. The company plans to roll out 4G services in coming quarter.