Profitable, sustainable growth key for digital India: Airtel's Gopal Vittal

In India the opportunity for home broadband is large, the number of connections underserved, which means there is a huge opportunity to wire up homes, says Gopal Vittal

Gopal Vittal, MD and CEO, Bharti Airtel tells Pavan Lall that pricing levels will have to correct if customer experience is to improve. He talks about the telco’s new intelligent predictive engine, which will be ready in four months and enable the company to understand each customer personally, increase engagement by leveraging artificial intelligence and anticipate and fix problems in real time. Edited excerpts:

Given the lurches in the past two years, what kind of a future telecom player are you going to become?
 

Our mission is to provide connectivity to every Indian across mobile and wired technologies and we are doubling down on investments and innovation from 4G networks to the launch of Volte to stepped up home broadband roll-outs. Last year, we invested $4 billion in India to roll out over 100,000 towers, nearly doubling our network footprint in just 15 months. 

At the heart is our digital brain that we call the 360 platform, an intelligent predictive engine funded at a cost of Rs 20 billion, which will enable us understand each customer personally, improve engagement by leveraging artificial intelligence and anticipate and fix problems in real time. It is a game-changer, will differentiate us and will be ready in four months.

How do you see the disruption in the broadband market after Jio’s entry?
 

I would say that in India the opportunity for home broadband is large, the number of connections underserved, which means there is a huge opportunity to wire up homes.

How do you aim to gear Airtel to ride through the disruptive pricing environment? 
 

India has around 1.3 billion customers to be served and three large private firms (Vodafone -Idea, Bharti and Reliance Jio) serving them... that is an amazing industry structure. That to us is the upside. From our perspective, we ask ourselves three questions. First, Are we doing all we can to invest in and improve our network? Second, are we well positioned to generate cash from our operations to sustain this investment? Third, are we doing all we can to strip out waste by leveraging technology to drive out inefficiencies? The answers to all these is, yes. 

That said, the current pricing levels are very low and result in poor return on capital for the whole industry. We believe this results in poorer experience for all given the very high consumption in key locations. It has to correct. Our view is that profitable and sustainable growth is very important for digital India. 

Some see lower prices as great for customers. 

In the last one year, customers are spending an additional hour on their devices. So, from about 190 minutes a day last year, people are spending 240 minutes a day now and that is staggering and translating into a dramatic surge in consumption. From 1 GB of data a month a year or so ago, today customers are using more than 8 GB a month. So, yes, for the customer there never was a better time to experience the power of the internet. 

From chatting to entertainment, commerce to running your business, all of this is happening on our network. And, this is what gives us confidence about our business model because we are at the centre of it. In an annuity business like ours, this level of stickiness with the service can only result in a massive upside.

  

What are your plans for Africa business? 
 

Airtel is committed to Africa. In the past two years, the business has been performing well and we are very pleased. We are also evaluating an IPO for the Africa business. 

What is your game plan on monetising tower business and other new revenue streams? 
 

We hav]e already announced the merger between Bharti Infratel and Indus Towers to create the world’s largest passive infra company outside of China. We believe, this is a logical move that will help serve all telcos better and in the process create a valuable company. As an integrated telco, we invest in growth engines beyond wireless. Our B2B business is around Rs 100 billion. We have a solid business in DTH. We have a data centre business in Nxtra. Then there is the payments bank. We also have a home broadband business where we have stepped up investments in network roll-out. We are offering a triple play across mobile, home broadband and TV. 

Are 5G auctions close enough to get a sense of how important it is for you? 
 

We have a world-class network operating centre in Manesar and we have already conducted India’s first 5G lab trial as a technology demonstrator. We are welcoming of the 5G auction, which is about speed and low latency, required for things such as driverless cars, robotic surgery etc. We would love to see these develop rapidly.

New Delhi, New Delhi,