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India needs three robust private telecom players: Airtel CEO

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In Short:

Bharti Airtel’s MD, Gopal Vittal, believes that Vodafone Idea’s recent capital raise will increase competition but benefit India’s telecom sector. He emphasized the need for significant tariff repair to boost ARPU to Rs 300 and hinted at charging a premium for 5G services. Airtel is focusing on expanding 4G coverage in rural areas and plans to revise its guidance on accessing balance rights issue proceeds in the next few months.


Bharti Airtel MD Gopal Vittal Comments on Telecom Sector

Bharti Airtel managing director Gopal Vittal stated that Vodafone Idea’s recent Rs 18,000 crore capital raise will enhance competition but is beneficial for India’s telecom sector, emphasizing the need for three strong players in the industry.

Tariff Repair and 5G Services

Vittal highlighted the urgency for significant tariff repair in the telecom industry to increase the average revenue per user (ARPU) to around Rs 300, as the current returns are insufficient. He did not specify when Airtel would start charging premium rates for its 5G services, but mentioned that the high data consumption levels would decrease once 5G services are priced.

Market Strategy and Competition

Expressing the importance of having three private operators in India, Vittal mentioned the competitive nature of the telecom marketplace and the need for continuous top-level execution to deliver sustained performance.

Tariff Hikes and Industry Growth

Vittal emphasized the necessity for substantial tariff repairs at an industry-wide level to improve return ratios, stressing that growth from Rs 200 to Rs 300 in ARPU would require multiple rounds of adjustments.

Network Expansion and Financial Performance

Airtel plans to focus on expanding its 4G presence in rural areas and aims to add 25,000 sites in the coming quarters. Despite a 31% decline in net profit in the consolidated March quarter due to factors like currency devaluation, the company showed strong growth in 4G and 5G users.

Financial Outlook and Guidance

Airtel’s stock closed higher following positive subscriber adds and revenue growth projections. The company will reassess its balance rights issue proceeds and release a revised guidance in the next few months to address the remaining tranche of the rights issue.

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