Airtel to Complete 5G Rollout in Urban Areas in 2023; Expects Network Investment to Be Around Rs. 28,500 Crore

"We are already in 3,500 cities and towns out of around 7,000 cities. We will conclude urban coverage this year," said Bharti Airtel MD Gopal Vittal.

By Press Trust of India | Updated: 18 May 2023 13:25 IST

Airtel to Complete 5G Rollout in Urban Areas in 2023; Expects Network Investment to Be Around Rs. 28,500 Crore

Photo Credit: Reuters/ Anushree Fadnavis

Bharti Airtel's net profit almost doubled to Rs. 8,346 crore for the year ended on March 31, 2023

Highlights

Majority of capex of Rs. 6,647.1 crore was deployed in mobile business
Airtel's consolidated revenue from operations grew by 14.31 percent
Airtel posted a 49.2 percent jump in its consolidated net profit

Bharti Airtel expects to complete the 5G rollout in urban areas and some key rural pockets this year and expects the investment in networks to hover around Rs. 28,500 crore, a senior official of the company said on Wednesday. Bharti Airtel Managing Director Gopal Vittal during the company's earning call said that the company's decision to not bid for premium 700 megahertz band spectrum and go for non-standalone 5G network is leading to better coverage at lower cost.

"We are already in 3,500 cities and towns out of around 7,000 cities. we will conclude urban coverage this year and some of the key rural pockets," Vittal said.

He said that the company has stopped making capacity expansion in 4G network as the company is seeing traffic offload of up to 30 per cent in areas where 5G has been launched.

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"I think the quarter's capex of Rs. 9,000 crore is little elevated, but if you take two full years, the capex is about Rs. 28,500 crores for the full year. As I mentioned before, if you take a three-year view, we will be broadly in that same ballpark of what we normally do.

"And we have reason to believe that the full-year capex for 2023-24, will be in the same broad ballpark as what we have the current year," Vittal said.

The company's capital expenditure in India more than doubled to Rs 8,989.4 crore in the March 2023 quarter from Rs. 4,276.7 crore a year ago.

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The majority of the capex of Rs. 6,647.1 crore was deployed in the mobile business as the company continues to build up a pan-India 5G network. The company exited the fourth quarter and the fiscal year 2023 with the highest industry ARPU of Rs 193.

"On a normalised basis we are already at Rs. 195. This was led by smartphone upgrades monetisation efforts and modest flow through increased tariff on the entry where we took pricing from Rs. 99 to Rs. 155," Vittal said.

He said that the return on capital employed is still very low at 8.5 percent and hoped some sense will prevail in the industry to move up tariffs sooner than later.

The company has started relocating 66,500 high-cost sites for specific actions around energy rental, as well as reengineering the site.

"Our smart investments and experience resulted in us staying out of the 700mhz band because we bolstered our mid-band holdings over a 4-year period. It was a bold decision to go with NSA which has non-standalone architecture on 5G.

"This is already giving us better coverage, lower capex, lower carbon footprint and better experience. The standalone network is also ready for enterprise," Vittal said.

He said that the company has now started going deeper into top 200 cities. When an analyst asked about Bharti Airtel 5G network roll out compared to that of Jio, Viital said.

"We are not in a maniac rush to compete on the number of sites. The technology we are using is different. NSA is fundamentally different from SA. It gives us more coverage.

"Reliance Jio is rolling out a standalone 5G network which means that it will provide only 5G services but in NSA architecture telecom operators can provide a mix of 5G, 4G and other networks.

Bharti Airtel on Tuesday posted a 49.2 percent jump in its consolidated net profit to Rs. 3,005.6 crore for the January-March quarter of 2022-23 on the back of new 4G customers and strong growth in average revenue per user (ARPU).

Bharti Airtel's consolidated revenue from operations grew by 14.31 percent to Rs. 36,009 crore during the reported quarter from Rs. 31,500.3 crore in the March 2022 quarter.

The annual revenue of the mobile services business in India grew by 21 percent to Rs. 75,924.6 crore in FY2023 from Rs. 62,915.1 crore in FY'22.

For the year ended on March 31, 2023, Bharti Airtel's net profit almost doubled to Rs. 8,346 crore from Rs. 4,255 crore a year ago.

The consolidated revenue from operations of Bharti Airtel for 2022-23 increased by 19.3 percent to Rs. 1,39,144.8 crore from Rs. 1,16,546.9 crore at the end of 2021-22.

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