Airtel could offer 5G on higher plans

“My feeling is that with 5G, penetration will increase so quickly that it will be like any other offer. Anyone who has a 5G handset will get 5G. They will consume more and automatically switch to a higher price plan. by higher revenue,” Gupta said. “I really don’t think there’s going to be anything like pure premium 5G I want to do.”

He added that 5G, like older and even future technologies, will be supply-driven, with users consuming more data with faster internet available to them, contributing to higher revenues for carriers. telecommunications.

“If you keep supplying, the demand will keep coming. When you provide more capacity and faster speeds, consumption is bound to increase. It’s human nature that if you get faster internet, you will consume more data,” Gupta said, adding that tariff plans in India are extremely low compared to global tariffs.

“Without a doubt, tariffs need to increase,” he added.

The average revenue per user (Arpu) for all Indian telecom service providers is much lower 200, with Airtel leading among its peers with an Arpu of 183 for the quarter ended June. Telecom operators have said they will increase their rates further this year, after raising prepaid rates by 20-25% in November. Telecom operators want to bring Arpus to around 300-350 in the medium term, but despite the increases, Indian tariffs will remain well below Western markets. For example, AT&T’s mobile postpaid Arpu was $54.81, or 4,379, in the June quarter.

Gupta said the entry of a new player, even in the long term, was not a concern for Airtel as it had grown its wits, facing several years of competition, including Reliance Jio’s assault in 2016. , and had managed to maintain good health. revenues, profits and free cash flow.

In the recently concluded spectrum auction, Adani Enterprises unit Adani Data Networks secured 5G spectrum in four rings in the 26 GHz band, aiming to offer enterprise or captive service. The company has maintained that it has no plans to enter consumer services, but several analysts have said Adani Group may enter the industry in the long term.

“We respect all competitors but are not bothered by any competitors. If, after so many years in this business, we hadn’t been able to face the competition, we wouldn’t be here. We got better and better with every problem that came our way. In the face of adversity, you have to stay strong mentally, operationally, culturally and financially. You have to keep a very strong balance sheet,” he said.

However, Gupta raised concerns about the financial health of Vodafone Idea, saying fundraising was essential for the company, which was unable to pay pending dues to Indus Towers, including the Bharti group holds 47.7%.

“That (the poor financial health of Vodafone Idea affecting payments to Indus Towers) is obviously a matter of great concern. We wish them good luck because we fundamentally believe that for the country it’s good to have three operators,” he said.

He further added that the financial health of the telecommunications sector must be kept in the dark for the industry to make future investments. “You have to look at the return on capital employed, which is currently very low. We really need to work to make it a healthy industry, because that will require continued investment. Financially weak companies cannot make such investments. Only healthy companies can. Therefore, in the national interest, the sector must be financially sound,” he noted.

Indus Towers, jointly owned by Bharti Airtel and Vodafone Group Plc, has made a provision for bad debts of approximately 1,233 crore in its results for the quarter ended June and saw a 66% drop in profit due to late payments from one of its customers. Indus did not name Vodafone Idea, but said it revised the expected credit loss policy to 60 days behind the previous 90 days and considered an additional impact of 954.7 crore in its income statement for the quarter.

Gupta said 5G will bring huge growth to tower companies as network deployments will require more tower infrastructure to be in place.

Regarding the mandatory use of non-Chinese equipment for telecommunications networks, Gupta said the country’s law must be respected when it comes to national security, even though Chinese players helped Airtel grow in its early years with low cost equipment.

Catch all industry news, banking news and updates on Live Mint. Download the Mint News app to get daily market updates.

More less

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.

Previous Faced with government action, Huawei will slow down its R&D operations
Next Ginebra San Miguel share: Remaining solid despite the macroeconomic situation (OTCMKTS: GBSMF)