Airtel India’s Data revenue growth continues to be strong though data pricing in India remains amongst lowest in the world. Management highlighted that weakness in data pricing has to be seen in the context of changing customer behavior. More and more subscribers are going for data and the decline in data yields is temporary.
Airtel Management informed that their entire 3G service is through loading on existing towers and this will remain the same in near future as there is no plan for 3G only towers as of now. Here are some more revelations in a Q&A with Bharti Airtel India & South Asia MD / CEO, Mr. Gopal Vital.
Indian Consumer is sort of price conscious on data now and does it make sense [as to] cut prices to add more and more customers or is that a no-no from your perspective?
Gopal Vital Said,
I think firstly, if you look at our data pricing today, it is amongst perhaps the lowest in the world at INR0.23, INR0.24 per megabyte, which is under $3 or just over $3 a gigabyte. Across circles as well, you see the same trend. So circles like Bihar, you see such serious congestion in Patna, but as you travel out of Patna, you see a lot more free capacity. The 12th factor is that the economics of 4G because of the efficiency of the electronics tend to be a little bit better and of course the ecosystem is not world enough, but the economics are much better because those equipments use much less energy and have a greater capacity.
So if you look at our 4G pricing, we have been a little more aggressive there, particularly when it comes to larger bundles, so we gave us higher commitment of ARPU and put in a lot more data. As a consequence, we are far more aggressive on 4G. So I think it’s kind of a mix thing where you got to play the pricing by different geographies and by looking at commitments, but yet ensure in the context of a limited spectrum situation how do you maximize the customer experience and equally maximize growth, I think those are the trade-offs here.
Airtel recently signed a contract with Ericsson on the 4G-LTE side, which is specifically mentioned as FD-LTE, what is the Management Roll out Strategy ?
Gopal Vital Said,
Airtel picked up spectrum, 1800 spectrum, contiguous spectrum, several circles, Karnataka, Andhra Pradesh, Tamil Nadu, Kerala, and some of the eastern circles we picked it up in Assam, etc. Now, therefore, it gives us a capability to launch 4G in FD. We are watching the space carefully to trigger our plans in the context of how devices in the ecosystem develops, but I’m afraid I won’t be able to share specific plans with you.
Does Airtel have Enough Telecom Spectrum to Accommodate Data Boom ?
Gopal Vital Said,
See, I mean we’ve made that again clear in the letter that wrote. We want a bundled spectrum to be made available. We want a big-bang option. So we can pick up spectrum at the right prices. And so therefore eventualities, because at the end of the day, you must remember that in the next you take a 5, 7-year time-frame, data is going to go 100 fold. So in terms of (inaudible) and you will need a lot more spectrum. At the end of the day, the [smart critics] will tell you that you just need more spectrum, you can’t run it on five megahertz, it doesn’t happen anywhere in the world.
Airtel India has the right Ingredient to take-on the challenge emerging from Reliance Jio Infocomm but by virtue of its venture into African Telecom maybe a drag on Indian Business too. Go Broadband tag line finally being cherished by operators 🙂