The management of Bharti Airtel will attempt acceleration of India capex in FY16 by an additional $200-400m. Airtel will have enough capacity (~120,000 BTS in 3G or 4G Coverage Pan India. Currently, it has 62,000 3G BTS and an estimated 20,000+ 4G BTS) by Q1-2016, leaving it comfortably ahead of Reliance Jio which will kick-off operations with around 75,000 LTE Towers when it launches next year. Airtel has spectrum in 900Mhz suitable for 3G and is branded as Airtel 3G Platinum while the 2100Mhz 3G is simply branded as Airtel 3G. 3G rollout also results in higher voice quality as voice from smartphones is also carried on 3G network. So accelerated 3G rollout increases both data and voice capacity.
4G-LTE services are deployed using 2300Mhz and 1800Mhz spectrum. 4G rollout is ahead of the curve. 4G handset shipments have seen good momentum (starting prices at Rs5000). 4G handset shipments was 1m two quarters ago, 5m in the last quarter and could touch 10m (out of 20m+ smartphones shipped) this quarter. Airtel has tied up with Samsung, Flipkart and other e-commerce players. Nearly 80% of smartphones shipped by Flipkart are 4G phones. Every phone will have an Airtel 4G SIM, which speeds up the seeding of the 4G base.
Data market is also top heavy. Out of 60m data subs, a small proportion accounts for a disproportionate amount of consumption. There is significant upside from the others. Content and genuine problem solving apps, affordable devices, and accelerated rollout will drive data growth. Management also confirmed that deployment of single RAN by competitors and moving out old 2G BTSs to rural areas was not by itself leading to any greater competition.
Airtel has made the highest spectrum investment in the industry and holds the best spectrum portfolio on a nationwide basis. Airtel has spectrum that would allow it to offer 3G and 4G services in markets that account for 98% and 74% of its revenue, which is significantly higher than Vodafone (87% and 33%) and Idea (79% and 61%). While JIO has better 4G spectrum portfolio, it does not have 2G and 3G fall-back and low frequency spectrum.