India’s top two telecom operators, namely Reliance Jio and Bharti Airtel might end up with 80% market share in the next 12 to 18 months believes Sunil Mittal, founder and Chairperson of Bharti Enterprises. In a report shared by Goldman Sachs, Sunil Mittal has expressed that from the current 75%, the top two operators in India can gain up to 80% of the market share in the coming time. Mittal also expressed his views on investing in subsidised smartphones and said that it would just be draining the company money. More details on the story ahead.
Bharti Airtel Looking to Convert Payments Bank License to Small Finance Bank
Mittal revealed to Goldman Sachs that Airtel is pushing to upgrade its Payments Bank license into Small Finance Bank license. This would help the telco in accepting larger sums of money (at the moment restricted to $1,500) and also enable money lending service to users. He further said that because of the current payment services, Airtel has been able to reduce the churn of mobile customers.
Talking about the low-end smartphones, Mittal said that the investment on the devices wouldn’t be justified in the long term. This is particularly because of the low average revenue per user (ARPUs) and high churn rate of mobile customers. He said that Jio doesn’t pose a huge threat with its low-end smartphone and 5G services launch since it will take some years for the 5G in the Indian market to mature.
Mittal also said that the current ARPUs are much lower than what it should have been. He said that Airtel would have achieved the ARPU of Rs 200 by now, but because of the slowdown caused by COVID-19, things aren’t at the right place. He did say that the ARPU will reach Rs 200 for Airtel in the coming months anyway. Mittal further said that the ideal ARPU for the industry should be Rs 300, and the high-end customers should be comfortable paying up to $6-7 per month (approximately Rs 500).
As for 5G, Mittal believes that today there aren’t sufficient use cases of 5G. Thus Airtel isn’t too much worried about launching 5G services soon. He also said that for 5G to happen in India, wide availability of low-cost 5G devices has to be ensured. Further, he has said before that Airtel might not participate in the 5G auctions which might take place in 2021 because of the high spectrum rates set by the regulator.
Tanay is someone with whom you can chill and talk about technology and life. A fitness enthusiast and cricketer, he loves to read and write.