Bharti Airtel's Managing Director and Chief Executive Officer, Gopal Vittal, clarified the company's spectrum position and spending for at least the next two years during the recent earnings call for the second quarter ending on September 30, 2023. Gopal specifically highlighted Bharti Airtel's advantageous position, considering the substantial mid-band spectrum the telco holds.
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Gopal mentioned that with NSA (Non-Standalone), Airtel has an added advantage compared to other players in India on the mid-band spectrum. This allows Airtel to work with NSA, deliver a better experience, and reduce CAPEX (Capital Expenditure).
"We also believe that merely throwing more capex and installing more radios is not a race as radios are in an abundant supply and keep getting better with every version," said Gopal.
Spectrum Renewal or Acquisition
In response to questions about acquiring spectrum in the 700 MHz (Sub-GHz band), Gopal clarified that the company had already made its position clear in the past. The company holds sub-GHz spectrum between 900 MHz and 850 MHz bands, with a bandwidth ranging from 5-10 MHz in every circle, and they have already made investments in this regard.
Gopal emphasised that having 5-10 MHz of spectrum primarily provides coverage rather than capacity. So, merely purchasing the 700 MHz spectrum at a cost of Rs 30,000 - 40,000 crores will provide the company with modest coverage but not capacity.
But the company already has sub-GHz spectrum, and Airtel holds a substantial amount of spectrum in the midband, anywhere between 20-30 MHz in all circles. According to Gopal, through NSA, the company is achieving 30 percent more coverage and greater reach, which provides an advantage for the company.
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Gopal reiterated that the company holds a workhorse spectrum in the 3.5 GHz band, along with millimeter wave spectrum. Therefore, he believes there is no need for any additional spectrum in the foreseeable future.
"The only place where some small chunks of spectrum may be needed is renewal spectrum. In some of the circles, there's very few circles, three or four circles where some spectrum may expire, but that is a function of what the traffic patterns are. There will be very little spending on spectrum, at least in the next couple of years," he added.
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2G Network Usage
Regarding the 2G Network, Gopal cited a few examples of markets (circles) like Gujarat, Delhi, and Kerala, where 2G devices now account for less than 7-8 percent. Mumbai witnesses less than 7-8 percent of the total number of 2G devices on the network. However, there are places like Bihar, UP, Odisha, and Rajasthan where there is a significant number of 2G devices, and the company expects that within the next three to five years, all of these 2G users will switch to smartphones based on the upgrade cycle.
2G Maintenance Charges
Regarding the cost of maintaining the 2G network, Gopal clarified that it doesn't cost very much because it's just software that is enabled on a very small chunk of spectrum. To recall, Airtel was the first to shut down the 3G network.
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AI and ML for Network Management
According to the CEO, Airtel has internally deployed AI and ML tools for managing network experience. They utilize "Intelligent load balancing" to handle the various technology layers that Airtel employs across different spectrum bands.
Gopal mentioned that the company also addresses environmental challenges, such as 'Atmospheric ducting,' which can cause radio interference. Airtel also rectifies 'sleeping cells' on the site, which are automatically reset in seconds to enhance the experience. Gopal stated that all of these processes occur in real time, resulting in an improved network experience.
