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Business News/ Companies / News/  Airtel readies battle plan to ride out the Jio storm
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Airtel readies battle plan to ride out the Jio storm

Airtel’s big focus now is to engage customers more on its network and drive data usage
  • Bharti Airtel is growing its India revenue and improving its quality of subscriber base
  • To upgrade users to 4G, and drive data usage, Airtel, also plans to shut down its 3G network across India by March.Premium
    To upgrade users to 4G, and drive data usage, Airtel, also plans to shut down its 3G network across India by March.

    New Delhi: Earlier this month, Reliance Jio dethroned Bharti Airtel as the number two operator in terms of subscriber base. Jio has also became the number one operator by revenue in less than three years of operations, surpassing Vodafone Idea in the June quarter.

    The turmoil in the telecom sector caused by Jio’s rock-bottom data tariffs and free voice calls, introduced in September 2016, has reshaped the Indian telecom market, leaving just two other private operators – the merged entity of Vodafone India and Idea Cellular, and Bharti Airtel – to compete with it.

    Analysts fear Vodafone Idea could be reduced to a regional operator given its mounting losses and shrinking revenue stream.

    But Bharti Airtel, at the same time, is growing its India revenue and improving its quality of subscriber base.

    Airtel reported a net loss of 2,866 crore in the April-June quarter, its first in 14 years, but that was largely the result of a one-time exceptional expenditure. Airtel’s revenue from India wireless business grew 4.1% year-on-year to 10,724 crore and customer churn was low.

    In comparison, Vodafone Idea posted a net loss of 4,873.9 crore, while its revenue fell 4.3% from the preceding quarter to 11,269.9 crore in the June quarter.

    Airtel has now sharpened its focus and is aiming for quality and not quantity of subscribers.

    To upgrade users to 4G, and drive data usage it also plans to shut down its 3G network across India by March.

    In fact, Airtel’s data consumption per user surpassed Jio for the second consecutive quarter. In the three months ended June, Airtel’s average data usage per month was 11.9 GB compared with Jio’s 11.4 GB.

    By ensuring stickiness for better paying users on the network, Airtel has managed to post the highest average revenue per user across the three telcos at 129, beating Jio at 122 and Vodafone Idea at 108. Average revenue per user is the total revenue of the operator divided by its subscriber base.

    “We are happy to lose subscribers who don’t pay us money," Bharti Airtel CEO Gopal Vittal said in the post-earnings call with analysts on Friday.

    To wean away inactive users from its network, the company had in November rolled out minimum monthly recharge plans starting 35. As a result, there was some customer churn but its average revenue per user also rose.

    Airtel’s big focus now is to engage customers more on its network and drive data usage.

    In May this year, created a loyalty programme for its prepaid users called Airtel Thanks, similar to what airlines offer to flyers, under which subscribers can reap benefits based on their tariff plans and consumption of digital services on the Airtel network.

    Airtel expects to achieve twin objectives of increasing its average revenue per user, which has been under pressure after Jio’s entry in September 2016, while getting them to avail more services as the telecom major embarks on its journey to morph into a digital platform.

    This loyalty scheme will be refreshed in the next three months. Airtel has, however, not divulged the details on this.

    Despite all these positives, the company continues to maintain that industry tariffs are unsustainably low and prices need to move up to ensure sector viability.

    But for that to happen, it has to pray that rival Jio does not get too greedy.

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    Published: 03 Aug 2019, 10:35 AM IST
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