Bharti Airtel To Complete 5G Roll Out In Urban Area This Year: MD Vittal

Bharti Airtel Ltd. expects to complete the 5G rollout in urban areas and some key rural pockets this year and expects the investment in networks to hover around Rs 28,500 crore, a senior official of the company said on Wednesday. Bharti Airtel Managing Director Gopal Vittal said during the company's earnings call that the company's decision to not bid for premium 700 megahertz band spectrum and go for a non-standalone 5G network is leading to better coverage at a lower cost.

"We are already in 3,500 cities and towns out of around 7,000 cities. we will conclude urban coverage this year and some of the key rural pockets," Vittal said.

He said that the company has stopped making capacity expansions in the 4G network as it is seeing traffic offloads of up to 30% in areas where 5G has been launched.

"I think the quarter's capex of Rs 9,000 crore is a little elevated, but if you take two full years, the capex is about Rs 28,500 crore for the full year. As I mentioned before, if you take a three-year view, we will be broadly in the same ballpark as what we normally do.

"And we have reason to believe that the full-year capex for 2023–24 will be in the same broad ballpark as what we have in the current year," Vittal said.

The company's capital expenditure in India more than doubled to Rs 8,989.4 crore in the March 2023 quarter from Rs 4,276.7 crore a year ago.

The majority of the capex of Rs 6,647.1 crore was deployed in the mobile business as the company continues to build up a pan-India 5G network. The company exited the fourth quarter and the fiscal year 2023 with the highest industry average revenue per user of Rs 193.

"On a normalised basis, we are already at Rs 195. This was led by smartphone upgrade monetisation efforts and modest flow through increased tariff on the entry, where we took pricing from Rs 99 to Rs 155," Vittal said.

He said that the return on capital employed is still very low at 8.5% and hoped some sense would prevail in the industry to move up tariffs sooner rather than later.

The company has started relocating 66,500 high-cost sites for specific actions around energy rental as well as reengineering the sites.

"Our smart investments and experience resulted in us staying out of the 700 MHz band because we bolstered our mid-band holdings over a four-year period. It was a bold decision to go with NSA, which has a non-standalone architecture on 5G."

"This is already giving us better coverage, lower capex, a lower carbon footprint, and a better experience. The standalone network is also ready for enterprise," Vittal said.

He said that the company has now started going deeper into the top 200 cities. When an analyst asked about Bharti Airtel's 5G network rollout compared to that of Jio, Viital said

"We are not in a maniacal rush to compete on the number of sites. The technology we are using is different. NSA is fundamentally different from SA. It gives us more coverage," he said.

Reliance Jio is rolling out a standalone 5G network, which means that it will provide only 5G services, but in NSA architecture, telecom operators can provide a mix of 5G, 4G, and other networks.

Bharti Airtel posted a 49.2% jump in its consolidated net profit to Rs 3,005.6 crore for the January-March quarter of 2022–23 on the back of new 4G customers and strong growth in ARPU.

Bharti Airtel's consolidated revenue from operations grew by 14.31% to Rs 36,009 crore during the reported quarter from Rs 31,500.3 crore in the March 2022 quarter.

The annual revenue of the mobile services business in India grew by 21% to Rs 75,924.6 crore in FY 2023 from Rs 62,915.1 crore in FY 22.

For the year ended March 31, 2023, Bharti Airtel's net profit almost doubled to Rs 8,346 crore from Rs 4,255 crore a year ago.

The consolidated revenue from operations of Bharti Airtel for 2022–23 increased by 19.3% to Rs 1,39,144.8 crore from Rs 1,16,546.9 crore at the end of 2021–22.