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Airtel for higher rates, but to keep 5G at 4G tariffs for now

NEW DELHI : Bharti Airtel Ltd will keep 5G and 4G tariffs at the same levels for another six to nine months, after which it may decide on fixing 5G tariffs separately, chief executive officer Gopal Vittal said. In a call with investors after the company’s second-quarter earnings on Tuesday, Vittal, however, reiterated the need for existing tariff levels to rise.

Vittal also flagged that countries like the US, Thailand and South Korea that had priced 5G differently from 4G saw very little uptake of 5G services, with only a fraction of customers of local telcos opting for the premium 5G plans.

“In some markets where operators have chosen to price 5G at 10-20% premium, what we find is that the take rate is a fraction of the full base of customers; so, in other words, the ARPU is an illusion. Ultimately, what we need for monetization is the tariff table in itself to go up… also right now (we are) just building out the network and then we take a decision as to what to do in maybe six to nine months,” Vittal said.

He added that the operator was aiming to fill up its 5G capacity over time and then refarm the 4G spectrum to use it for 5G as well, backing Airtel’s strategy of keeping 4G and 5G tariffs the same.

Vittal said that Airtel could take the lead, especially in the postpaid segment, which has a higher share of premium customers, by taking a short-term advantage of the financial struggles faced by Vodafone Idea.

“We believe there is a serious short-term opportunity to grow share and disproportionately win quality customers leveraging the power of 5G. Given the financially pressed situation that one of the players in the industry is going through, we feel that the moment is ripe for Airtel to pull ahead and become the decisively most aspirational brand in India. With this, we hope to take a further lead, particularly in the postpaid segment,” he said, without naming the No. 3 carrier, Vodafone Idea.

Airtel added over 300,000 postpaid users in the quarter ended 30 September, taking the total number to 31.5 million, which it said was the largest base of postpaid customers in the market.

Vittal stated that the carrier had started testing standalone 5G or 5G SA technology architecture, being deployed by rival Reliance Jio pan-India, which he said would be applicable to enterprise use cases.

Airtel executives have previously stated that the carrier will eventually move to SA depending on the demand, but in the near to medium term, it will use the non-standalone or NSA architecture.

The carrier is also testing its mmWave spectrum for fixed wireless access (FWA) services.

Vittal further stated that Airtel would expand its rural area coverage by deploying low-cost sites, which will help it gain market share profitably.

“We are now seeing over 40% of industry 4G net adds coming from rural areas and believe the time is right to bridge a substantial part of the coverage gap in mobile against the leading player in the industry,” he said, adding that the carrier had developed data science models to determine deployment and sent teams to determine areas of opportunity.

Bharti Airtel’s consolidated net profit rose 86% to 2,145 crore for the quarter ended September 2022 from 1,134 crore the same quarter last year, and up by 33% from June quarter profits of 1,607 crore. Revenues rose by more than 22% to 34,526 crore.

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