Bharti Airtel Chief Executive Officer Gopal Vittal has laid out a multi-pronged strategy for the telecom company to stay profitable in a tough market. This includes going after high value subscribers, maintaining a leaner organisation with incentives for performers and acquiring more spectrum for growing the data business.

Speaking to Business Line on the sidelines of the Mobile World Congress here, Vittal said the entire focus of the company has shifted from growing the user base to driving up the average revenue per user (ARPU).

New milestone “The challenge is to get value subscribers, how to create differentiation and increase the wallet share of existing users. So, user acquisition will not be a driving force anymore.” Airtel touched the 200-million user mark this month, just four years after it reached the 100-million mark. But now, with nearly 700 million active mobile users in the country, Vittal will have to look beyond volumes to sustain growth levels. “We are seeing 3-4 per cent incremental growth in new users, so majority of the growth has to come from growing ARPU. One of the biggest things we have done was to reduce churn to 2.6 per cent from 7-8 per cent,” he said.

To motivate his sales team, Vittal has recast compensation and management incentives.

“Everyone is focussed on the first two months after acquiring a new subscriber. We want to make the experience such that the churn levels come down further,” said the CEO, who brought Airtel’s profit back into growth last quarter after years of declining numbers.

But the road ahead will not be easy for Airtel. All the major players are equally geared up for data services and with the impending launch by Reliance Jio, Vittal has his job cut out. But more than the existing telcos, Airtel may lose revenues to Internet companies. Instant messaging players such as WhatsApp have already shaved off a huge pie of the company’s SMS income.

Vittal reckons that the playing field should be made level by bringing such players under the licensing regime.

“Many of these players don’t pay licence fee, they operate on unregulated environment. The telcos on the other hand are highly regulated. There has to be greater deliberation on how to look at this,” he said, quickly adding that it’s a symbiotic relationship with Internet services companies as innovation is happening in these companies.

“We won’t be able to grow data on our own.” But to grow data, Vittal wants to get hold of more spectrum. “We can’t imagine how much growth is possible on data. The need for spectrum is incredible in data world,” he said.

More spectrum Vittal’s recipe to address this need is to put more spectrum for sale in the next auction and consolidation.

“This market can do with five-six players. The consequence of having more players is fragmented spectrum. If you want mobile broadband to grow, then this industry cannot take so many players,” he said.

Asked if Airtel would acquire any telecom company to get access to more spectrum, he said it won’t happen unless there is a complimentary reason. “Our focus now is to take the existing business and make it sharper.”

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