Bharti Airtel targets top 150 cities and towns for 5G subscriber expansion

Bharti Airtel will ramp up 5G coverage in the top 150 cities and towns to grow its postpaid segment and cut costs to build revenue and reduce debt.

Outlining plans in a post-result conference call on Wednesday, Airtel’s Managing Director Gopal Vittal said the company had identified 150 cities that account for nearly 40 per cent of all telecom sector revenue in the country for its 5G network expansion. This would also help grow its post-paid segment, which typically has lower churn and generates higher average revenue per user. Similarly, 40,000 community clusters have been identified in rural areas to widen its customer base.

Airtel launched its 5G service last October. The service is now available in 70 cities and will be expanded across the country by March 2024. Vittal said the non-standalone technology that the company was deploying for 5G was also giving 30 per cent wider coverage. The company will squeeze its 4G investments and focus more on the 5G network.

Other cost-saving steps will include lowering of sales and distribution expenses and spend on tower rentals and fuel.

Airtel reported 91.5 per cent year-on-year growth in net profit to touch Rs 1,588 crore in Q3 FY2023 led by revenue growth and increase in 4G customer additions. Capital expenditure for the December-end quarter was Rs 9,313 crore compared to Rs 7,416 crore in the September-end quarter. Vittal said the company reduced its net debt by Rs 3,000 crore in the third quarter despite higher capex, and would continue to use its free cash flows to further cut debt.

Airtel reported average revenue per user (ARPU) of Rs 193 in Q3 FY23 with widening of its 4G customer base. “ARPU needs to go up. ARPU of Rs 300 will be critical and we hope it will happen in due course,” Vittal said.

The company hiked its entry-level pack price from Rs 99 to Rs 155 in Haryana and Odisha in December and followed this up with 17 other circles as it did not see any significant customer churn.