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Business News/ Companies / News/  Airtel may take control of Indus if volatility due to Vi persists: Gopal Vittal
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Airtel may take control of Indus if volatility due to Vi persists: Gopal Vittal

Vittal’s comments on Indus come on the back of Vodafone PLC flagged concerns about Vodafone Idea’s abilities to meet its payment dues – estimated to be more than ₹7,000 crore – to Indus

Airtel may take control of Indus if volatility due to Vi persists: Gopal Vittal Photo by Sanjeev Verma/ Hindustan TimesPremium
Airtel may take control of Indus if volatility due to Vi persists: Gopal Vittal Photo by Sanjeev Verma/ Hindustan Times

NEW DELHI: Airtel is willing to take on the ownership of tower provider Indus Towers which has been facing issues due to financial troubles of its key customer Vodafone Idea, Airtel MD and CEO Gopal Vittal told analysts in the earnings call for Q4FY23.

“Tower business is our heartbeat, so we cannot afford to have that in any way face volatility. So if it means that in the short term to prevent volatility because one player could have challenges, that we have to creep up and actually take control, we will," he said, in response to a question on Indus Towers. He, however, added that if the tower business remained stable, the need for such a step would not arise and the carrier may look at reducing stake as it was a non-core business.

Vittal’s comments on Indus come on the back of Vodafone PLC flagged concerns about Vodafone Idea’s abilities to meet its payment dues – estimated to be more than 7,000 crore – to Indus, and adding that the payments were dependent on Vodafone Idea’s plans to raise funds. The No 3 carrier has been attempting to raise 20,000 crore since FY21. As of March 31, 2023, Bharti Airtel holds 47.95% and Vodafone Group. through its indirect wholly owned subsidiary companies, holds 21.05% in Indus Towers.

Airtel, which recorded a 50% on-year jump in net profit to 3,006 crore for the fourth quarter ended March 2023, added that it will no longer channel investments into 4G capex. From FY25, the No 2 carrier is expecting lower levels of annual capex versus the 28,500 crore expected in FY24 as the 5G urban coverage will be completed through the year.

“We’ve stopped all capacity investments into 4G since we're now seeing traffic offload of up to 30% in a site where 5G has been launched... Our 4G rollout is more or less complete. There'll be very small rollouts in a few circles, but broadly we are not investing anything more in 4G capacities," Vittal told analysts in the earnings call.

“Wireless capex on 5G will certainly come down relative to what you've seen this year because we will have completed the urban coverage more or less during the course of this year and we will start hitting some of the villages as well," he said, adding that the company will assess capex requirements in FY25.

Vittal added that the company will invest in linking up towers to fibre and in other businesses such as data centres and homes. Vittal had said in August last year that Airtel would advance its annual capex in FY23 to speed up the 5G rollouts. For FY22, Airtel’s total capex was 25,661 crore, up from 24,168 crore in FY21. The Sunil Mittal-promoted carrier intends to cover all urban areas by the year end.

The Airtel top boss reiterated the need for raising tariffs as the data tariffs in India were amongst the lowest in the world, and noted that the pricing structure that India follows needed correction where customers using higher amounts of data should pay more, echoing demands of No 3 carrier Vodafone Idea that had called for the same in its previous earnings calls. Vodafone Idea is yet to announce its results.

“Indian telecom industry's pricing structure is broken with adoption of one size fits all pricing model. In a consumer industry, you would typically have people who are able to pay more get more (allowance or services)..people who pay less get a lot less....There is no reason for them to buy higher plan unless they are unique users. So it is not the right price architecture which we need in a market like India...," Vittal added. He added that in the current pricing environment, 5G pricing would remain challenging.

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ABOUT THE AUTHOR
Gulveen Aulakh
Gulveen Aulakh is Senior Assistant Editor at Mint, serving dual roles covering the disinvestment landscape out of New Delhi, and the telecom & IT sectors as part of the corporate bureau. She had been tracking several government ministries for the last ten years in her previous stint at The Economic Times. An IIM Calcutta alumnus, Gulveen is fluent in French, a keen learner of new languages and avid foodie.
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Updated: 18 May 2023, 08:25 AM IST
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