5G rollout to give business a fillip, says Airtel CEO Gopal Vittal

• Airtel expects rollout of 5G services to give a fillip to business in the short-term.
  
  
• With 40% new data subscribers coming from rural India, Airtel is ready to capitalize on this opportunity by rolling out new sites across key areas.
  
  
• ARPU rises to ₹190 as more feature phone users migrate to smartphones.

After delivering a stellar performance during the September quarter, which saw Airtel’s consolidated revenues rise by 5.3% sequentially to ₹34,527 crore and operating margins to 51.8%, the company’s CEO, Gopal Vittal, told analysts that the rollout of 5G would give the business a fillip in the short-term.

The telco is betting on 4G consumers migrating to 5G seamlessly, almost at the flick of a button. The company has already taken over the mantle of delivering industry leading growth in its mobile business, which grew by 4% sequentially and also grabbed the numero uno position in the post-paid segment. During the September quarter, Airtel added 300,000 post-paid customers and became a decisive leader in the category.

Even as the company is playing a portfolio strategy, by offering differentiated services across segments and geographies, the mobile business reported industry-leading growth. The mobile business in India saw a sequential revenue growth of 4% on the back of up-trading and continued upgrades from feature phones to smartphones. What also helped the revenue growth was the flexibility users had to buy extra data on any day within the plan cycle when their allowance ran out. This aided ARPU to move up from 183 to 190. This was achieved on the back of 5 Mn 4G net adds – a recovery from last quarter, explained Vittal.

Vittal said that the company had launched 5G plus in key cities, as it had done with its 4G services back in 2015. By March 2024, Airtel’s 5G services would be available across all towns in urban India. Said Vittal, “As the network starts getting built out we will see a significant part of our existing data traffic on 4G move to Airtel 5G plus. This is important since it will allow us to gradually move more and more spectrum to 5G at the flick of a button.” Airtel is of the view that it may be early days yet for some of the enterprise use cases of 5G, there is a “serious short term opportunity to grow share and disproportionately win quality customers leveraging the power of 5G”.

He added that since one of its rivals was in a financially pressed situation, “the moment is ripe for Airtel pulling ahead and being the decisively most aspirational brand in India. With this we hope to take a further lead particularly in the post paid segment.”

For those consumers looking to migrate to 5G, Airtel promises that its next generation of data services would work seamlessly on all devices. All of Xiaomi, Oppo, Vivo and Real Me devices are now ready. Samsung and OnePlus will also be fully ready in a matter of weeks, as would Apple for Airtel’s 5G services. Vittal, however, said,”This cannot be said with alternate technologies where many devices will deliver either an inferior experience or simply not work on 5G. A second advantage we offer is superior experience. With our anchor band riding on the underlying 4G layer, our 5G band covers an additional 100 meters to provide a compellingly superior experience. The third advantage is that our solution is more power and carbon efficient for India.”

It is not just 5G that is expected to act as a lever of growth for Airtel. The company sees an opportunity in rural markets too as 40% of new data customers are coming from the hinterland. Explains Vittal, “We are now seeing over 40% of industry 4G net adds coming from rural areas and believe the time is right to bridge a substantial part of the coverage gap in mobile against the leading player in the industry.”

The company is applying lessons it has learned in the past to determine its strategy in rural India. Airtel is using data science models to determine exactly where to go. It is combining on field staff and data science to anticipate demand drivers. And in order to achieve this growth, Airtel has designed and built lower cost sites that will allow us to expand profitably.