MUMBAI: Bharti Airtel has no plans to launch a locked phone like rival Reliance Jio’s Jio Bharat device last month, CEO Gopal Vittal said, adding that the telco does not see a major impact on its 2G user base.
Key Points
The country’s second largest telco said the feature phone market accounts for 18% of its total revenue and Airtel is focusing on increasing premiums by moving these users to 4G networks.
Vittal’s Words
On Friday, speaking at the operator’s first quarterly earnings call, Vittal said the telco will not compete with rival Reliance Jio for 5G coverage, but will only focus on quality services.
“We are not launching such a device. Our feature phone user is on 2G network and we are focusing on upgrading them to smartphones,” Vittal said on the impact of the Jio Bharat launch.
All Jio customers are 4G customers and launching a feature phone like the JioPhone in 2016 is seen as a strategy to target core phone users who are yet to switch to 4G, analysts said.
Although the JioPhone launch affected Airtel at the time, the market has changed since then and there are now fewer 2G users, Vittal explained.
“Today, the phone division accounts for about 18% of our total revenue. And most importantly, only once in four years does the customer decide to change the particular phone.
According to him, the price of this device (Jio Bharat) is slightly higher than the cheapest feature phones. Vittal reiterated that the telco is doubling down on migration of feature phone users to smartphones through bundle and modest cashbacks in the form of locked phone loans.
Airtel v/s Jio
Airtel connected 5.6 million 4G customers to its subscriber base in the quarter ended June 30 and reported an ARPU (average revenue per user) of Rs 200, up 3.6 percent from the last quarter. Whereas, Jio added 9.2 million users and ARPU rose 1%.
Vittal attributed this ARPU growth to higher 2G-4G upgrades, postpaid net additions of €0.8 million and the impact of Airtel’s entry-level tariff initiatives from November 2022 to March 2023.
155 in the circuit during that period. “This was Airtel’s largest postpaid customer addition in the quarter,” Vittal said, adding that the growth was due to both Airtel prepaid users switching to postpaid networks that did not yet offer 5G, such as Vodafone Idea. aided by an aggressive on-site retail strategy.
The top executive said capital expenditure continued to be front-loaded, reaching Rs 9,300 crore in the June quarter, in line with guidance of Rs 28,000-31,000 crore.
Despite the large capex, the carrier generated free cash flow of Rs 4,827 crore for India, Vittal said.
“Capex is for Airtel (through) 5G deployment, transport infrastructure, broadband deployment and future proofing of data centers, each of which is a great opportunity for future growth,” he said.
But he added that Airtel “is not in any competition here (with Jio) (in terms of 5G deployment).”
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“We are leveraging the launch to ensure a seamless experience regardless of technology – a great data and voice experience across the city,” he said, adding that the phone now moves investment in 4G capability to 5G.
Airtel’s investments in 4G are now mainly focused on expanding rural coverage. Of the 60,000 high-power villages identified by the telco, 60 percent have adopted 4G and are expected to complete it by the end of the current calendar, Vittal added.
He said Airtel is also piloting fixed wireless (FWA) in two cities to assess this possibility. However, he added that the challenge remains the financial side of FWA devices, which currently cost almost twice as much as a home broadband router.
He also pointed out that Airtel’s designated non-standalone (NSA) mode also enables network slicing, although the demand for such technology is currently minimal due to the abundance of network capacity.