Bulk of spectrum needs met through deals, says Airtel's Vittal

The company is entering the new fiscal year on a high as its minutes volume is the highest in 18 quarters

Bharti Airtel has exited FY16 on a very strong note. This strong financial performance put up by the company is a result of a carefully laid-out strategy. In a call with analysts, the firm explained key factors that have contributed to the company’s performance in the March quarter.

Like the previous quarter, the company added 7.9 million subscribers during the quarter (total subscribers at 251 mn) which has helped drive minutes usage on the network. Gopal Vittal, chief executive of Bharti Airtel India and South Asia, said: “We have stepped up customer acquisition  and kept a check on churn. We are playing portfolio game and look at India as 650 districts and not as 22 circles.” While tariff hike is inevitable as costs have increased, the company’s management maintained that any price action would not happen immediately.

The company is entering the new financial year on a high as its minutes volume is the highest in 18 quarters.   Minutes on the network grew 11 per cent (year-on-year) and six per cent (quarter-on-quarter).

This growth has been driven by a four-pronged strategy. The company is monitoring customer behaviour across 650 districts and not circles. The company has also stepped up focus on customer experience, which has driven volumes. Additionally, a group of smaller players have been either affected or have shut down operations which helped Airtel.

In new fiscal, Airtel has estimating $3 billion of capital expenditure, of which $2.2 billion will be spent in India.

On the data front, even though data ARPU (average revenue per user) was weaker than estimated, the company maintained that it was not a cause of concern as some wholesale customers (other telecom operators consuming data through intra circle roaming arrangement) moved out. This trend is expected to continue over the next couple of quarters. Vittal explained, "Revenue growth in data is lower than previous quarter as some operators who were on ICR have got their own spectrum. Volume growth in data is 70 per cent. Our data penetration has flattened a little but for that we are looking at ways to improve data penetration. We are working on getting more people to use to data by improving internet literacy."

The company's management maintained that bulk of its spectrum needs were met through recent deals. However, it would selectively look at acquiring 3G spectrum as it does not have that in one circle yet. Also, Vittal reiterated that the 700 MHz spectrum was unaffordable as stated by the company in the previous quarter.