ARPU needs to go up to ₹300: Airtel CEO

Our Bureau New Delhi | Updated on July 30, 2020

Gopal Vittal, MD and CEO, Bharti Airtel

Gopal Vittal said 5G is still a few years away as ecosystem not ready

Bharti Airtel (Airtel), on Thursday, again said that the average revenue per user (ARPU) must go up to ₹300 for a 'sustainable business' to continue, also added that commercial roll out of 5G is still a few years away and needs readiness of the ecosystem.

The company's ARPUs have been on a rise over the last few quarters, touching ₹157 (from ₹154 in last quarter) in the first quarter ended June 30 also.

"As I have always said – we continue to believe that ARPUs need to move up to ₹200 and eventually to ₹300 for a sustainable business model," Gopal Vittal, Managing Director and Chief Executive Officer (India and South Asia), Airtel said.

Speaking at an earnings call on its first quarter results, Vittal spoke about 5G. He said, apart from being an expensive price for the spectrum, the ecosystem is still very nascent.

"The price of the spectrum on 5G are very expensive and we will not be able to afford it at those levels. We don't believe there's a business case at those levels. Secondly, the ecosystem for 5G is still very nascent in terms of applications and devices," he said.

Having said that Vittal also said that Airtel will not be behind anyone on launching 5G products, just like it was ready during the time of 3G or 4G, when the ecosystem was ready.

"We continue to invest in next-gen technologies. During this quarter we partnered with Altiostar to deploy open virtual radio access solution --normally called  vRAN. We will become the first operator in India to deploy vRAN based 4G network. This solution has 5G ready software and would provide seamless evolution to 5G using the same architecture," he said.

Quarterly earnings

The company on July 29, reported a staggering consolidated net loss of  ₹15,933 crore in the first quarter ended June 30,  as compared with a net loss of ₹2,866 crore in the corresponding quarter last year.

However, the revenue rose by 15 per cent year-on-year (YoY) to ₹23,939 crore as against ₹20,738 crore during the first quarter ended June 2019.

The company said due to the nationwide lockdown, supply chains were disrupted, leading to a sharp drop in smartphone shipments and in turn impacting the pace of 2G to 4G upgrade. Further, a large part of Airtel's offline channel partners were closed, including its own retail stores, restricting people’s ability to recharge conveniently.

The pace of network deployment also slowed down and the company has been managing its networks remotely, activating new channels such as Grocers, Pharmacies and ATMs as well as accelerating digital channels.

"I believe these actions have held us in good stead. With these actions we have begun to see business recover. Smartphone shipments are also back to pre-Covid levels. Most of our stores are now open," Vittal added.

Published on July 30, 2020

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