Bharti Airtel CEO Gopal Mittal has given clarity on their spending for FY25 on 5G. Gopal Vittal said that from FY25 onwards they are going to reduce spending money on 5G infrastructure. The telecom operator has completed its 5G rollout goals for FY24 and also gained a lot of market coverage in rural areas as well. Thus, in FY25, Airtel will reduce capex towards rolling out 5G by about half (expected).
By How Much Airtel will Reduce Capex in FY25?
During the earnings call for Q3 FY24, Vittal didn’t give any specific guidance towards how much the capex will reduce, but only said, that Airtel is confident that the capex will moderate.
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Vittal also talked about tariff repair for the industry. By “repair”, he means a rise in tariffs. As the tariffs continue to go up, Vittal said that the capex-to-revenue ratio will drop. For the unaware, capex to revenue shows how much money the company is making on their investments. If the ratio is high, it means the company is heavily investing in the growth and if the ratio is low, it means the sales are pretty high and the investments have been reduced to improve profit margins.
What Will be Airtel’s Capex for FY25?
For FY23, Airtel’s capex towards rolling out networks and telecom infrastructure was Rs 28,500 crore. For FY24, it is expected anywhere to be around Rs 30,000 crore. However, in FY25, it is expected to drop by 50% and be around Rs 15,000-Rs 16,000 crore.
But it wasn’t just 5G that Airtel spent money on. Airtel has been ramping up investments in rural India and the telco has set up 30,000 sites to expand its mobile network coverage in 60,000 villages to gain more 4G customers.
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Airtel’s Next Target for India
The next target for Airtel is to expand coverage in five circles – Maharashtra, Madhya Pradesh and Chhattisgarh, Gujarat, Kerala, and West Bengal. Jio is the leading service provider in these circles, and Airtel wants to cover that gap.
