Bharti Airtel hosted Analyst call this afternoon and here is an excerpts from the same.
- Earlier this morning I had raised questions on the drastic QoQ fall of ARPUs and the management clarified that the same was due to new regime of lower mobile termination charges [MTC]. Rs 12 / user / month is the actual impact of MTC on Airtel.
- Over 60% of Revenues from non Tier-1/2 cities of India. Partnerships with IFFCO and Micro Finance institutions to expand rural mobile base. These customers typically increase their usage by 15-20% in 12-15 months after they go Mobile 🙂
- Management sounded happy with 478 MOU / Month with addition of 2 mn non-city subscribers every month. Airtel management not really worried about churning customers flirting with operators offering freebies.
- Bharti Airtel has no Mergers and Acquisition plans in the local market even though the Government and Regulator maybe setting the pitch ready in medium to long term.
- Tenancy revenue of Infratel tower is in the range of Rs 33,000 to Rs 36,000 a steep increase and the management didn’t have the answer ready to explain the same and said they will get back.
- Network operating cost has gone up to 18.3% from 14.5% 12 months ago and to 11.5% 24 months ago. Airtel is trying to be efficient but failed to satisfactorily explain the run-up in cost.
- On 2G Spectrum Availability – Lucky to get the necessary spectrum. If additional is not allocated timely, Airtel will not limit its growth but rather resort to better network planning and will incur higher CAPEX and continue to add subscribers.
- CAPEX Guidance – The management has given a CAPEX Guidance of $2.2 bn for FY 2010 excluding 3G bidding.
- Management decided not to comment on important questions like – Competitors offering per second billing, DTH Operations, Differential in Rural and Urban ARPUs, 3G and WiMax networks and bidding
- Quarter of Planned Network Consolidation – Airtel / Vodafone / Idea Cellular – Wireless CAPEX was significantly lower in Q1 FY10 and the management said that they wanted to consolidate without any haste to add new towers. Indus was also doing the same [Vodafone + Idea]The goal was to take stock of the existing infrastructure and measure efficiency before carefully beginning to expand where it is really essential.
It will be interesting to see the ARPU drop with RCom and which is already bleeding. The Telecom battle has just intensified, stay tuned 🙂