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Airtel Unique Strategy Pushing the Telco Towards Strong Future


Bharti Airtel, the second-largest telecom operator, is in a very good position post the tariff hikes and the reforms announced by the government. Note that Airtel wasn’t in a bad position either before the sectoral reforms were introduced. The reforms have just helped the telco in strengthening its market position and freed up cash flow to be able to invest in its networks for optimising performance and reaching more Indians as fast as possible.

Airtel ARPU Was Highest in the Industry, Tariff Hikes to Push Further

Bharti Airtel’s average revenue per user (ARPU) figure was already the highest in the industry before tariff hikes. With the tariff hikes, that should only grow further. The telco is in a very sweet spot. Airtel’s target is to reach Rs 200 ARPU levels in the short term and Rs 300 in the long term. With this tariff hike, the telco’s ARPU should get a strong boost as low-end users would discontinue purchasing services or port out to more affordable alternatives such as Reliance Jio and Bharat Sanchar Nigam Limited (BSNL).

Airtel will be left with users who are willing to pay more for getting better services. Note that a postpaid tariff hike is in order as well. While the telcos haven’t hinted anything about that, postpaid services are also expected to become more expensive in short to medium term.

All of this will increase the blended ARPU of the telco, and the December quarter should be a sweet period for the telco.

Bharti Airtel Has More Cash to Invest in Networks

Bharti Airtel will have more cash to invest in networks following the acceptance of a four-year moratorium on payments of the spectrum and adjusted gross revenue (AGR) dues. The telco will further benefit from the reduced bank guarantees (BGs) and Spectrum Usage Charges (SUC) in the future. To top this, the government is also returning thousands of crores worth of BGs to Airtel within this month.

While the other operators are also going to benefit from this, Airtel is expected to make the biggest difference. The telco already has better 4G coverage than Vodafone Idea in India, and this freed up cash should allow it to invest more in increasing the capacity and reaching out to even more people.

Most of all, Bharti Airtel will be in a very strong position to deliver 5G to India. Vodafone Idea is still recovering from its position while Bharti Airtel must be making moves to improve services already.

DTH and Fiber Broadband Business Booming as Well

Bharti Airtel’s Direct-to-Home (DTH) and Fiber broadband business is also growing strongly. The telco is reaching out to more and more cities with its fiber services which in turn is allowing it to maximise its revenues from services apart from mobile networks. The DTH business, namely Airtel Digital TV, is already an established brand, and by offering Android Set-Top Box (STB), the telco is looking at the future of TV services which is a good thing to stay relevant.

But most of all, Airtel Black service is going to make an impact on the telco’s financials if it is successful. With Airtel Black, consumers have the convenience of paying for everything, including DTH, broadband, and mobile services, under a single bill. It is not just about being cheap; it is about getting a seamless service.

All of this puts Airtel in a very great spot for the future, and the telco’s plans for 5G further give its enterprise business a strong boost.





Source: https://telecomtalk.info/airtel-unique-strategy-pushing-the-telco-towards/485801/

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