Gopal Vittal said in the immediate short term a lot will depend on the speed of the regulator’s consultations and the actual timing of the auctions.
Airtel CEO Gopal Vittal on Wednesday said the infrastructure reforms announced by the government for the telecom sector will help maintain cash flow and boost investments to the industry.
Mr. Vithal, who was speaking on Airtel’s second quarter earnings call, said that in the next 3-4 years, while 5G will be present on a ubiquitous basis in most major cities, much in the immediate short term will depend on the regulator’s momentum. Real time consultation and auction.
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“As you are aware, the government announced fundamental reforms that will help preserve cash flow and enable the industry to drive investments. We do our business by reducing multiple unnecessary approvals and simplifying customer on-boarding processes. Adequate steps have also been taken to simplify the method of
To a query on moratorium of payments, Mr. Vittal pointed out that on opting for moratorium (as with Bharti), the interest payable on moratorium gets converted into Net Present Value (NPV) with options 1-2.
“One is to defer the payment at the end of the four-year period or actually pay it every year in the subsequent anniversary period, or convert to equity. All options are still open,” he said.
The decision to convert to equity is to be taken in January but the other two decisions are calls which can be taken every year. The company will remain financially prudent and ensure that the business continues to invest in large-scale growth areas such as broadband, data centers, enterprise businesses, digital assets and rolling out 5G networks.
Responding to a question about the timeline for the 5G rollout, Mr. Vithal said the industry has urged the telecom regulator to look at all spectrum bands.
“You need to look at all spectrum bands to see what is the totality of spectrum available in India… operators, understand what our spectrum strategy should be,” he said.
He stated that the 700 MHz band spectrum was “very highly priced” and had seen “three unsuccessful auctions” and needed to be “substantially controlled in terms of price”.
“Then there is 3.5 GHz where a lot of spectrum is lying with the defense, how much spectrum is going to be available is another question and of course, the mmWave (millimeter wave) band is … will be put on the block and I don’t know. That it may happen soon,” Mr Vithal said.
These deliberations may take some time, Mr. Vithal said, “but we will wait and see that when the consultation is over, it comes to the DoT (Department of Telecom) and then, of course, The spectrum will be put on the block”.
The company believes that the mobile industry ARPU (average revenue per user) is not sustainable and should improve to ₹200 in the near term and ₹300 in the long term.
Airtel on Tuesday reported a net profit of ₹1,134 crore for the September 2021 quarter and said it is seeing strong business momentum with growth in 4G subscribers and growth in mobile ARPU.
This is against a loss of ₹ 763.2 crore (attributable to the parent owners) during the year-ago quarter.
The Q2 numbers were boosted by exceptional profit (after tax) of ₹540.4 crore. Bharti Airtel in August announced the closure of an agreement with Reliance Jio Infocomm to transfer the ‘right to use’ of its 800 MHz spectrum in three circles to Jio.
Airtel’s consolidated revenue for Q2 FY11 was ₹28,326.4 crore, up 18.8% year-on-year (on a comparable basis) and 13% yoy on a reported basis.
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