This is a shift from its earlier stance of being only an aggregator from third party players as it takes on Reliance Jio as well as global players Netflix, Amazon Prime and others. To step up its act, Airtel has already bid for cricket content like the digital rights for the Indian Premier League T-20.
Vittal said, “We are open to all possibilities from setting up a separate company, acquisitions or commissioning exclusive content. The question we keep asking is do we have the DNA to be a content company, which requires a very different set of skillsets. That’s the question we are grappling with before writing cheques.”
The group’s focus on investing a few billion dollars in acquiring content is logical. Its capex spend this year on network is estimated at Rs 240 billion. Of its total investment worth Rs 2.7 trillion till now, Rs 1 trillion has been spent on spectrum alone.
With content clearly the key to drive data usage, Bharti’s rival Reliance Jio has already invested in companies
like Eros International as well as Balaji Telefilms. Jio has also upped its stake in Viacom18, which has a bouquet of channels, to 51 per cent.
has over 50 million customers on its Airtel TV app and boasts of the largest music app in the country at 80 million installs and 20 million active users every month.
On the core telecom business, Vittal said the company had initiated a plan to shut down 3G operations in phases, so that it could move to 4G by refarming the spectrum efficiently. "We have identified the circles of Karnataka, Andhra and Delhi for shutting down 3G services in the near future," said Vittal. However, 2G services are likely to continue over the next five years. In many circles like Bihar, Uttar Pradesh and Odisha, more revenues are generated from 2G rather than 3G or 4G, he said.
Vittal believes three players--Bharti, Reliance Jio and the merged Vodafone-Idea—are likely to have equal revenue share of the Indian market in future.
State-run BSNL could hold some 3 to 4 per cent share, he said. “If you ask me where it will settle, I think clearly you will have three large private operators with more or less equal shares….That’s a good place to be. It’s a sustainable and ideal industry structure,” he added. In other words, it means Bharti will be able to maintain its position at 33 per cent. The expectation is that Jio will increase its revenue share from the current 20 per cent range at the expense of Vodafone-Idea which together have around 40 per cent. Bharti Airtel, which has seen its margins and profitability get bruised due to the Jio onslaught, admits that the current trend is not sustainable. “If you ask whether the pricing is unsustainable, the answer is yes it is and it has to correct.”
As for when the competitive intensity could come down, Vittal said, ‘’it’s very difficult to guess.’’ He added that its not only pricing that was a problem but even the quality suffers due to low tariff.
“When you have low levels of pricing, there are certain pockets of the network where you run into congestion, so we have to keep chasing the capacities but equally you need pricing to be more realistic in order for the whole industry to be profitable. Ultimately, we are here to be a sustainable operator because only than we can put in the investments,” Vittal said. However, over the last 18 months, the company has seen data usage grow 13-14 times.
On Airtel’s preparedness on 5G, he said a pilot is going on at its Manesar centre and the company was keen that the ecosystem develops in India in line with the rest of the world. “We want India to have 5G with the world. 5G gives you much higher speed but also gives you much lower latency. The real advantage of 5G is lower latency. The ecosystem is still nascent but India should not lag behind,” he added.
Rs 2.7 trillion
Investment by Airtel so far; telco is putting in another
Rs 240 billion this year on network expansion and upgrade
Number of 2G users in the country; Airtel believes 2G will survive for five more years
It has prepared a plan to close down 3G services in many circles and cities so that it can use the spectrum to bolster 4G services