Tuesday, 12 December 2017

Bharti Airtel hikes 4G capex, plans 3G switch-off

By Nick Wood, Total Telecom
Thursday 02 November 17

Indian telco to plough €3.3 billion into network expansion as price war takes its toll

Bharti Airtel has ramped up capital spending on its Indian 4G network to 250 billion rupees (€3.32 billion) from INR200 billion for the current financial year. The Economic Times reported this week that the India-based telco has also revealed plans to shut down its 3G network and refarm spectrum in the 2…

Bharti Airtel has ramped up capital spending on its Indian 4G network to 250 billion rupees (€3.32 billion) from INR200 billion for the current financial year.

The Economic Times reported this week that the India-based telco has also revealed plans to shut down its 3G network and refarm spectrum in the 2.1 GHz band for 4G.

Gopal Vittal, CEO of Bharti Airtel's India and South Asia division, said during the company's results call on Wednesday that the money will be used to improve RAN coverage and add capacity to Airtel's fibre backhaul networks, in a bid to stave off intense competition.

"When pricing stays low, capex is required to deliver a better customer experience, especially as we are seeing a massive growth in data throughput and data demand," he explained, according to the report.

Bharti Airtel also plans to reuse its 2.1-GHz spectrum – currently used for 3G services – for 4G. Ergo, the telco plans to wind down its 3G network over the next three-to-four years to free up the frequencies. Meanwhile, its 2G network will be maintained for the foreseeable future, because 50% of phones shipped to India are still basic feature phones, Vittal said.

"We are likely to see [the] 3G network actually shut down faster than [the] 2G network," he said.

The comments were made alongside the publication of Bharti Airtel's fiscal second quarter results.

Group revenue for the three months to 30 September fell to INR217.77 billion from INR246.52 billion a year ago, driven by a double-digit decline in India, which is still reeling from the damaging price war. Net income plunged 76.5% to INR3.43 billion from INR14.61 billion.

In a statement, Vittal said he expects further downward pressure following the Telecom Regulatory Authority of India (TRAI)'s decision to reduce the interconnection usage charge (IUC) to INR0.06 per minute from INR0.14 from the beginning of October.

"This will eventually force operator consolidation and exits as we have witnessed in the recent past," he warned.

Bharti Airtel ended September with 366.06 million mobile customers, up from 346.89 million a year ago. Its domestic business saw customers increase to 282.05 million from 259.94 million, while customers at its Africa division grew to 81.93 million from 78.15 million.

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