Airtel eyes new data plans to take on Reliance Jio
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New Delhi: Bharti Airtel Ltd said growth in data subscriptions is likely to slow for another quarter and it plans to offer lucrative contracts to customers to fend off competition from new entrant Reliance Jio Infocomm Ltd.
The management of India’s biggest telecom operator, in a post-earnings conference call with analysts on Wednesday, acknowledged the difficulties in competing with something which is being offered for free, referring to Reliance Jio providing free voice calls for life and free data till 31 December.
“We will need to bundle data and voice more aggressively, especially 4G data. This market will change in the next 3-4 years. Even as feature phones will continue, the smartphone market is moving towards 4G, and with the asymmetry of share and technology, we might see a lot more bundling,” chief executive officer Gopal Vittal told analysts. “Telecom market has always been competitive and will continue to be so.”
In the quarter to September, data realization per MB (megabyte) declined by 20.2% from a year ago. Voice realizations per minute also dropped 6.2% from the year-ago period. Voice Arpu (average revenue per user) declined to Rs132 in the second quarter from Rs140 in the year-ago period, while data Arpu rose to Rs201 from Rs193 in the September quarter last year.
To tackle competition, Bharti Airtel has slashed data tariffs to retain market share and has also expanded its 4G services to 18 circles in the past one month.
The company reiterated its stance on releasing an adequate number of points of interconnection (PoI) to Reliance Jio Infocomm Ltd.
“We are aware of proposed penalty and we will go back to Trai (Telecom Regulatory Authority of India) and DoT (department of telecommunications) to resolve this issue. In the past five weeks, we have released 2.5 times the E1 (erlangs that enable connecting two networks) per million customers to Reliance Jio than to any operator. We have never seen such augmentation,” Vittal said. He also said that is an absolute non-issue and a part of their regulatory obligation.
On Tuesday, Bharti Airtel reported a 4.9% decline in September quarter profit to Rs. 1,460 crore from Rs. 1,536 crore a year-ago, because of a reduction in data tariffs.