Airtel to complete 5G roll out in urban area this year, says official

Bharti Airtel expects to complete rollout of 5G network in urban areas and some key rural pockets this year and expects investment in networks to be around Rs 28,500 crore, a senior company official said on Wednesday.

Gopal Vital, managing director of Bharti Airtel, said during the company’s earning call that the company’s decision not to bid for premium 700MHz band spectrum and move to a non-standalone 5G network leads to better coverage at a lower cost.

“We are already present in 3,500 cities and towns out of about 7,000 cities. We will be wrapping up urban coverage this year and some major rural pockets,” said Vital.

He said the company has stopped expanding capacity in its 4G network as the company is seeing traffic offloads of up to 30 percent in areas where 5G has been launched.

“I think the quarterly CAPEX of Rs 9,000 crore is a bit high, but if you take two full years, the CAPEX is around Rs 28,500 crore for the whole year. As I mentioned earlier, if you take a three year view, we will broadly be in the same ballpark for what we usually do.

“And we have reason to believe that the full-year capex for 2023-24 will be in the same general ballpark as the current year,” Vital said.

The company’s capital expenditure in India more than doubled to Rs.8,989.4 crore in the March 2023 quarter from Rs.4,276.7 crore a year earlier.

The majority of the CAPEX of Rs. 6,647.1 crore has been deployed in the mobile business as the company continues to build the pan-India 5G network. The company exited the fourth quarter and fiscal year 2023 with the highest average average per user in the industry of Rs 193.

“On a normal basis, we are already at Rs 195. This has led the effort to monetize smartphone upgrades and modest flow through entry tariff increase as we took the prices from Rs 99 to Rs 155,” said Vitthal.

He said return on capital employed remains very low at 8.5 percent, and he hoped some sense would prevail in the industry to raise tariffs sooner rather than later.

The company has begun moving 66,500 high-cost sites for specific actions around energy leasing, as well as site re-engineering.

“Our smart investment and experience has kept us out of the 700MHz band as we have boosted our mid-band holdings over 4 years. It was a bold decision to go with NSA which has a non-standalone architecture on 5G.

“This really gives us better coverage, lower expenses, lower carbon footprint and a better experience. The standalone network is also ready to go,” said Vital.

He said the company is now starting to dig deeper into the 200 largest cities. When an analyst asked about Bharti Airtel’s 5G network rollout compared to Jio’s, Vitthal said.

“We are not in a hurry to compete for the number of sites. The technology we use is different. The NSA is fundamentally different from the SA. It gives us more coverage.

“Reliance Jio is rolling out a standalone 5G network which means it will only provide 5G services but in NSA engineering telecom operators can provide a mix of 5G, 4G and other networks.

Bharti Airtel on Tuesday reported a 49.2 per cent jump in its consolidated net profit to Rs. 3,005.6 crore for the January-March quarter of 2022-23 on the back of new 4G customers and strong growth in Average Revenue Per User (ARPU).

Bharti Airtel’s consolidated revenue from operations grew by 14.31 per cent to Rs. 36,009 crore during the said quarter from Rs. 31,500.3 crore in March 2022 quarter.

Annual revenue of the mobile services business in India grew by 21% to Rs.75,924.6 crore in FY2023 from Rs.62,915.1 crore in FY22.

For the year ended 31st March 2023, Bharti Airtel’s net profit nearly doubled to Rs.8,346 crore from Rs.4,255 crore a year earlier.

Consolidated revenue from operations of Bharti Airtel for the period 2022-23 increased by 19.3% to Rs.1,39,144.8 crore from Rs.1,16,546.9 crore at the end of 2021-22.