Bharti Airtel says “free offers” will impact telcos, lenders government revenue

Bharti Airtel, in an investor call post the announcement of quarterly results, said that free offers by telcos would hit all stakeholders, including lenders, and government revenue in the short to medium term with debt exposure of over Rs 400,000 crore to the industry.

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The country’s leading telecom operator also alleged that this predatory pricing has led to unprecedented drop in the industry revenue table for the first time since its inception. The development is now jeopardising the financial health of poster child — the Indian telecom industry, the telco said.

“In India, the continuation of free pricing by a new operator has led to tsunami of traffic to the network impacting overall data revenue and voice realisation,” Bharti Airtel Global Chief Financial Officer Nilanjan Roy said during company’s earning call. “To say that we are living in interesting time would be an understatement.”

Airtel’s managing director for India & South Asia Gopal Vittal said that it’s going to be an ARPU game going forward, and all about maximizing RMS in an industry that will see rapid consolidation over the next 12-15 months, with predatory pricing unleashed by an operator.

Airtel is now preparing for a tough battle to protect its ARPU and maximising its revenue market share (RMS), media reports said. The telco will now be focusing on to bring innovative bucket plans that deliver value and lock the right ARPU customers into its network and grow RMS.

Notably, in the third-quarter, Airtel’s ARPU fell 8.4% sequentially to Rs172. It also reported a 55% fall in net profit to Rs 504 crore, which is worst in four years. The leading telcos also reported a first ever on-year revenue drop, mainly impacted by Jio’s free services and demonetisation.

Moreover, Bharti Airtel is reportedly looking to monetise tower assets in five African markets to generate an additional Rs4,080 crore.

The telco plans to use these funds to take on the price war with Reliance Jio, media reports said.
Bharti Airtel’s consolidated capital expenditure guidance for fiscal 2017 will likely be below $3 billion, it informed analysts and investors.

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Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

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