Do not foresee material change in Capex profile with 5G: Airtel CEO

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February 04, 2021 7:30 PM

Vittal maintained that the industry needs tariff hike to nudge the average realisation per user per month towards Rs 200 initially, and Rs 300 eventually.

airtelBharti Airtel has logged net profit of Rs 854 crore for December quarter.

Bharti Airtel – which recently declared that its network is 5G-ready – does not anticipate any material change in its capital expenditure profile with the advent of fifth-generation services, its CEO Gopal Vittal said on Thursday.

Addressing an investor call after announcing a strong Q3 performance, Vittal also said that the company will shut down its copper infrastructure in a year or so, and only have fibre to the home.

“We are…in the process of rapidly upgrading our legacy copper assets completely to Fibre,” he said, terming it a “game-changing move”.

Outlining the company’s spectrum strategy, Vittal said Bharti Airtel is keen on a full footprint of sub-GHz spectrum across the country, even as it looks to balance a combination of capacity and renewals.

“There are many circles…where we don’t have a sub GHz spectrum, so we would love to have that. There are some renewals coming up on 1800 band, there is also some capacity spectrum available on 2300 band where we already got deployed equipment…a combination of capacity or renewal we will look and balance it, and make sure we optimise what we do,” Vittal said.

His comments came at a time when the government has set the ball rolling for the spectrum auction, in which radio waves valued at Rs 3.92 lakh crore will be put on the block. The auction in seven spectrum bands for mobile services – 700, 800, 900, 1800, 2100, 2300 and 2500 MHz bands – is scheduled to start from March 1.

On tariff hikes, the Airtel top honcho declined to comment on specific timing when rates would go up, saying it is a competitive issue and based on market dynamics.

“I believe, we will be ready to take up tariffs if and when any player actually moves tariffs, given that we are already at a premium,” he said.

Vittal maintained that the industry needs tariff hike to nudge the average realisation per user per month towards Rs 200 initially, and Rs 300 eventually.

“We would love to see tariffs go up. This is obviously something that industry needs if ARPUs (Average Revenue Per User) have to go to Rs 200 and finally to Rs 300, which is something as an industry we deserve in order to generate a reasonably good return on capital deployed…this is what would be required for the business model to succeed,” Vittal said.

The company had last week announced that its network is 5G ready as it successfully demonstrated live fifth-generation service—with ultra-high speeds—over a commercial network in Hyderabad.

“We do not believe that with 5G introduction, whenever it comes, we are going to see any material change in Capex profile. As you invest in 5G, you will stop investing in 4G because capacity creation will be done on 5G which will obviously be the lower cost of producing a gigabyte, given that you have much higher spectrum in those bands,” Vittal said.

Bharti Airtel has logged net profit of Rs 854 crore for December quarter against Rs 1,035 crore loss a year ago, as the telco witnessed improved realisations and the strong customer additions.

Airtel also posted its highest-ever consolidated quarterly revenue of Rs 26,518 crore in the third quarter of 2020-21, up 24.2 per cent over the year-ago period.

On Wednesday, the board of Bharti Airtel also approved fundraising plans of up to Rs 7,500 crore via debt instruments such as debentures and bonds in one or more tranches.

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