airtel postpaid: Airtel poised to expand its leadership in the postpaid business: Gopal Vittal | Techno Glob


Bharti Airtel can benefit from Vodafone Idea’s ongoing financial woes and further grow its market share, especially in the premium postpaid segment, using 5G services to win customers proportionately. Managing Director Gopal Vittal added that India’s second largest telco’s 5G services will be at 4G rates in the next six to nine months as it expands its next-gen network.

“Given that one of the players in the industry (read: Vodafone Idea) is financially strapped, the time is ripe for Airtel to step forward and gain leadership, especially in the postpaid segment,” Vittal said. On Tuesday, the company spoke to analysts about its second-quarter earnings.

Vitthal did not name Vodafone Idea, but the cash-strapped operator is the only loss-making private telecom operator in India and is struggling to survive.

At the end of August, market leader Jio had a subscriber share of 36.48%, followed by Airtel at 31.66% and Vodafone Idea at 22.03%, according to the sector regulator. Jio, Airtel and Vi’s revenue market share stood at 40.9%, 35.5% and 17.7% respectively in Q3FY23.

Vitthal added that the addition of 300,000 postpaid users in the July-September period made the telco a “decisive leader” in the revenue-generating segment.

Vittal also took a dig at arch-rival and market leader Reliance Jio – without naming the company – saying many phones will not work on 5G networks deployed using alternative technologies or standalone mode (SA). The non-autonomous (NSA) mode that Airtel is using.

“Airtel’s 5G works seamlessly across all 5G devices, but the same cannot be said of other technologies where many devices deliver a poor experience or do not work on 5G,” said the Airtel MD.

The NSA mode leverages existing 4G infrastructure such as mid-band spectrum (1800 MHz, 2100 MHz bands) with the 3300 MHz band to offer 5G speeds. Jio, on the other hand, has decided to use SA where all the infrastructure – cell sites etc. Experts say that while the SA mode offers the best version of 5G, the handset ecosystem is not as developed as those that support NSA. Eventually, when most traffic moves from 4G to 5G and all devices support all modes and bands and voice on 5G matures, all networks will transition to SA. Jio has previously said that its SA-based network works well with all devices and offers better quality 5G than its competitors that use NSA mode.

According to Vittal, overall valuation should rise quickly as ROCE (return on capital employed) of Airtel’s India and South Asia operations remains very low at 8.4%. “The only way to fix the situation is to fix the rate, especially for businesses that are risk-averse and have invested significant capital to drive digital adoption, this level of ROCE is very low.”

But he added that the telco will continue to price 5G services at 4G rates as it is still rolling out its next-generation network and will call out the prices of 5G services separately in six to nine months.

But he declined to say when the next price hike would be, an exercise easier said than done, saying problems could arise if Airtel takes the lead and the competition doesn’t respond.

His comments came a day after Airtel posted an 89% year-on-year rise in consolidated net profit to ₹ 2,145.2 crore for the September quarter.



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