Airtel has announced that will launch its 5G services later this month, and is gazing to cover 5,000 towns and cities by March 2024, Gopal Vittal, the company’s chief executive officer and managing director, said in an analysts call on Tuesday. India’s second-largest telecom company proclaimed five times increase in net profit in the June quarter.
“Airtel is well positioned to win the 5G game and we intend to launch 5G services immediately and by March 2024 will be able to cover every town and key rural areas as well,” Vittal said. As more 5G-enabled devices become available and more 4G traffic shifts to 5G, Airtel plans to first improve mid-band airwaves for 5G and ultimately its sub-1Ghz spectrum in the 900 MHz band. Vittal’s comments came a day after Airtel’s combined net profit for the June quarter jumped 467% year-on-year, on the back of 4G user additions and higher data utilisation, besides the surplus effect of the price hikes, magnifying its average revenue per user (ARPU).
Airtel’s MD said the telco’s intrusive 5G rollout plans could entail some advancement of Capex spends, though predicted spending over three years would stay constant.
Harjeet Kohli, joint managing director, of Bharti Enterprises, who participated in the call, said Airtel could make surplus calls if required to tap into its balance rights issue proceeds to meet any advance 5G CAPEX needs.
Last October, Airtel had raised around Rs 5,247 crore in the first proportion of its Rs 21,000 crore rights issue. The balance of Rs 15,753 crore is obtainable when the telco chooses to make the two additional calls. The $700 million from Google has already come following the US tech giant’s purchase of a 1.2% stake in Airtel.
To interpret queries on the next price hike and attainable premium pricing of 5G vs 4G, Vittal said Airtel is on course to grow its ARPU to Rs 200 and eventually to Rs 300 arising out of tariff rises. “5G isn’t generating incremental ARPU anywhere in the world, but India is different as tariffs remain low.so with every tariff hike returns on capital can get better.”
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