Airtel CEO Vittal compares fiber strategy to Uber as rollouts accelerate

gopal vittal airtel
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Bharti Airtel chief Gopal Vittal credits adoption of an “Uber-like” digital model with local cable operator (LCO) partners with helping it accelerate the rollout of fiber-based broadband services in India.

Airtel is partnering with LCOs to leverage their existing fiber network to expand its own broadband services in smaller cities and towns.

“Our innovative Uber-like digital model with the Local Cable Operator partners, as also the acceleration in the roll out of our own fiber in the top 100 cities, are the pivots around which our home broadband strategy revolves,” said Gopal Vittal, CEO and MD of Airtel at fiscal third quarter earnings call on Wednesday.

Vittal said that the operator is continuing to step up investments to expand its fixed line broadband services in the country, and that the investments will help Airtel expand its network to 2,000 towns across India with 35 million home passes in the next three years.  

Airtel is currently locked in an intense battle with Reliance Jio to acquire new fixed-line broadband customers in the country. As per recent data from TRAI, Reliance Jio overtook state-run BSNL as the largest provider of fixed broadband services in the country with 4.34 million subscribers. BSNL had 4.2 million broadband customers, while Airtel reported 4.08 million.

Vittal said that Airtel – India’s second largest telecom operator – was seeing healthy customer additions driven by the increased demand of fiber-to-the-home.

“We have now hit a milestone of going past the 4 million customer homes mark. Sequential growth has been strong at 11.8% this quarter,” he said.

Airtel’s overall presence has now expanded to 672 towns, with the telco adding 1.1 million home passes in the quarter. “We believe fiber-to-the-home is a massive opportunity for us.”

Vittal also called for easier 5G spectrum payment terms in the upcoming auction and urged, TRAI to heed the telecom industry’s call for a sharp reduction in spectrum reserve prices.

“We hope the regulator will  recommend more considerate payment terms for the upcoming 5G spectrum auction and ring in a dramatic reduction in the reserve prices as Airtel won’t be able to afford the [5G spectrum] prices set in the last auction,” he said.

Commenting on the recent reforms introduced by the Indian government, Vittal said, “More needs to be done and we look forward to the next round of measures planned by the Government. In particular, the high levies on the industry need rationalization.”

The regulator is expected to finalise its recommendations on 5G spectrum pricing next month and the auction is expected to happen by May-June.

During the earnings call, Vittal said that India’s installed base of 5G devices as a percentage of overall smart devices was still at 3-4%. He added the pace of 5G adoption from a consumer standpoint would only happen by FY24.

“A factor in determining where to deploy 5G technology would be to put it in places where no further investment in 4G is required,” he said, adding that TDD deployment was almost done from the telco’s point of view.

To further improve financials and ARPUs, the Airtel boss said that the company won’t hesitate to take the lead in pushing through another round of tariff hikes in 2022 itself.

Airtel is looking to increase ARPUs to Rs 200 ($2.67) this calendar year, and eventually to Rs 300 ($4.01) going forward.

However, he added that the next price hike would only happen after the current wave of SIM consolidation eases.

“Tariffs remain abysmally low in India and another round of price hikes will definitely happen in 2022, although it won’t in the next 3-to-4 months as the current [wave of] SIM consolidation caused by the last round of hikes needs to come down,” Vittal said.

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