Bharti Airtel on Tuesday said that the tariff hike in July was encouraging and may show positive impact on its financials in the next two quarters. The company said it is prepared to launch its standalone 5G network to support its fixed wireless access (FWA) broadband service in the country within August-September.
“I think by the time we get to the end of this quarter two, we will have a very good read because some of flow will come through in quarter two, but some will happen in quarter three because of the nature of the recharge cycles and validity of the packs that people consume,” Gopal Vittal, Managing Director, Airtel said in an post earnings call with analysts.
He said it was a little premature to say there was a fundamental change, but from what the company has seen from early weeks, by and large some SIM consolidation in the lower-end of the market, particularly around its 2G user base have happened.
“As of now it is more or less in line with our action standards. Fundamentally, as far as data is concerned, we have not seen too much of down trading yet. Yes, there is some reappraisal that happens whenever tariffs go up, and there is delay of recharges,” Vittal said.
Improved ARPU
The company’s average revenue per user (ARPU) has improved to ₹211 in the June quarter, compared with ₹200 in the same period a year ago and the industry needs a minimum of ₹300 ARPU for long-term sustainable investment, he said
On FWA broadband service, he said, “The incremental capex to run 5G SA is modest. All our radios and core networks are SA radio, we need software to enable it. When we launch SA by August or September, we will be available nationally.”
He said Airtel’s Homes business segment will continue to see strong growth because there are still over 20-25 million high-value homes that still don’t have broadband.
“...we do know that every time a smart TV is bought, it’s a moment of reappraisal for that home to consider broadband. So to that extent, we do believe that this will continue to grow. The pricing of broadband is still low in India as compared to other market,” he said adding that the bulk of the market is looking at top 1,000 cities right now.
Also, the focus on Homes for Airtel’s will be fiber (to home) as a first protocol because the experience that it is able to deliver on fiber is much better on both downlink as well as uplink than any other technology, he noted.
Airtel on Monday, had declared a consolidated net profit of ₹4,160 crore for the first quarter ended June 30, compared with ₹1,613 crore in the corresponding period last year.
Consolidated revenue from operations grew by 2.8 per cent y-o-y to ₹38,506 crore during the quarter in review, compared with ₹37,440 crore in the April-June quarter last year.