Bharti Airtel’s operating performance improved progressively through the quarter. Smartphone sales (slowdown impacted 4G adoption) are now back to pre-Covid levels. Local and district-level lockdowns continues to cause minor disruptions. However, the management is not seeing any further erosion in its customer base.
Management said that the current tariffs are still at low levels. They have guided for ARPUs to move to Rs200 in the short term and Rs300 in the medium term. Besides tariff hikes, ARPU increase will also be driven by increase in share of 4G subscribers (better mix). Management did not comment on the exact timing for tariff increase. Secondly, the company believes that the current data allowances are way too generous and price architecture needs to become more sensible going ahead. [Our Take – The inability of Airtel Management to be agile & disruptive in its thinking has led the company to give up lead market position to competition]
Airtel recently launched a new campaign Open to Questions in a bid to eliminate failures and further enhance customer experience. Airtel is also bundling payment bank services with its connections to provide a seamless and secure payment experience but unable to gain the same level of traction Paytm or other mobile wallets have.
Broadband Solutions With changing work landscape, there is increase in demand for higher capacity and bandwidth from the large enterprise customers. However, there is pressure in the SME segment. Bharti is seeing good growth in conferencing solutions and accelerated conversations on security, cloud and data centers. There has been massive surge in latent demand of fixed broadband [DSL / FTTH]. In the smaller cities, the company is partnering with local cable operators for last mile connectivity. It has already adopted this partnership model in 14 cities. The LCOs deploy and maintain last mile connectivity in this model and are paid a % share of revenues.
Airtel’s Digital Platform Airtel is looking to develop new streams of revenues and drive efficiencies through its digital platform. It has built content offerings through partnerships an art which it has mastered from the beginning. It is also building partnerships with global technological companies in several other areas. Customer understanding, strong distribution network, smooth payment system and location-based understanding will help grow this platform. The company is building an Ad-tech model to capitalize on the 155 mn subscriber base it has on the various digital assets.
Spectrum Management suggested that the company is quite comfortable with its spectrum footprint. It is still contemplating on the spectrum in the mid-band coming up for renewal. The company would like to complete their sub-GHz spectrum portfolio across the country which provides better indoor experience. Airtel believes that the commercial deployment is still at least a couple of years away. The device ecosystem and business case will take some time to evolve. On spectrum, they continues to believe that the indicative pan-India spectrum price for 5G is expensive.
Jio armed with much robust Network (Spectrum & back-haul Fiber) and virtually unlimited cash too burn will definitely give superior experience to its customers. Can Airtel really compete and win in this touch market ?