Airtel expects capex intensity to come down from FY25, telco deploys team to look into use cases of Artificial Intelligence

Airtel expects capex intensity to come down from FY25, telco deploys team to look into use cases of Artificial Intelligence
Source: IANS
  • Airtel’s wireless capex to come down from FY25 as 5G rollouts are likely to get done this fiscal.
  • Slowing shipments of smartphones and lesser use cases around 5G to limit investments next fiscal, says company’s CEO Gopal Vittal.
  • Airtel appoints a team to look into disruptive technologies like ChatGPT and how they can be incorporated into regular business functions.
The intensity of Bharti Airtel’s capital expenditure is slated to come down by FY25. This may come as music to the ears of investors because the last year and the current fiscal too will see the company spending close to ₹30,000 crore on capex as it undertakes 5G rollouts across India. The telco has exited FY23 with a capex of ₹28,500 crore. The company expects to complete urban rollout of 5G by the current year and the intensity of the rollout will decline in the following year, as the telecom industry is ahead of the curve with its investments.

Addressing an analyst meet on Wednesday, Airtel’s chief executive officer, Gopal Vittal, said: “Wireless capex on 5G will certainly come down relative to what you will see this year. We have completed urban coverage this year and will also roll out across top villages. This is a modular business and string a set of radios on a tower. We see shipments of smartphones coming down and this is a trend worldwide because replacement cycles are extended. If that trend continues there will be some relief on capex as we head into FY25.”

Commenting on the behaviour of consumers, Vittal said that the ecosystem has not yet created enough use cases for 5G. The applications that most consumers use, like messaging or for video, do not require the kind of speeds that 5G offers. Just as 4G triggered a spate of innovations around content, entertainment and payments, Vittal is of the view that the ecosystem around 5G is yet to evolve.

He said: “In my view 5G is not just a radio technology. It is a supercomputer and it is connected to the cloud. It gives you lower latency and you can have 100x devices connected compared to earlier 4G. The applications today that are used like video and messaging do not need the supercomputing capabilities that 5G allows. Content, applications and the entire ecosystem needs to change. The telecom industry is ahead of the rest of the ecosystem.”

Airtel will not be making any further investments in 4G rollouts either. “I would imagine that our 4G rollout will be complete by FY25. We are not investing anymore in 4G capacities. Will continue to add towers,” he added. The company will, however, continue to invest in businesses like homes and data centres. Vittal explained that currently, 32% of Airtel’s postpaid customers had a 5G handset. Today 5G is being given free on existing plans, but those consumers who had opted for 5G were consuming a lot more data.


When asked why home broadband ARPU (average revenue per user) was coming down, Vittal said that many of Airtel’s customers are coming from beyond the top 100 cities, which was leading to some dilution in ARPUs. However, the business was profitable and margins were strong given that the cost of doing business in these cities was done on an innovative business model.

At an analyst call, one would expect questions on the company’s business plan and financials but the first question that Airtel’s Vittal was asked during the call was on artificial intelligence (AI) and use cases of technologies like ChatGPT. Vittal said that the company had appointed a team to look into the use cases of the new disruptive technologies. He explained: “We have a full team assessing the impact of AI on our business. There are opportunities around experience, customer service and go-to market, analytics and procurement. There are also attendant risks around cybersecurity. We have begun some experiments around these. We have a team working on these new technologies and how they can be brought into our core business.”