Airtel may drop tariffs further to fight off Reliance Jio: Key highlights

To win against competition, Airtel will target more rural markets

Taking on Reliace Jio, Gopal Vittal, chief executive officer and managing director of Bharti Airtel, believes the telco will retain market leadership, as nothing can be offered free for life.

While Airtel will not proactively cut rates, it will wait for Reliance Jio Infocomm’s tariffs to kick in and then do what it takes to be competitive. Howeber, Vittal added that Airtel is not obsessed by its competitors, but it is obsessed with customers. 

Key highlights:

Airtel might drop tariffs further if needed to fight Reliance Jio as the latter has rolled out free services for a limited period
 

According to Vittal, JIO's entry would hurt smaller players more and lead to industry consolidation. 

For Airtel, the motto is simple. Win customers for life — and that drives everything they do. Revenue Market Share is the only metric that determines if customers are giving you a higher share of their wallets. 

Airtel will continue to bank upon its spectrum assets, brand, network expansion and capital expenditure.

Airtel doesn’t deserve to be fined on the Jio points of interconnection issue, said Vittal. The telco is talking to both the telecom department (DoT) and the Telecom Regulatory Authority of India (Trai) to explain facts. The regulator has recommended a Rs 1,050 crore penalty on Airtel for flouting license conditions by not granting adequate PoIs to the new operator. 

Lower price is not disruption:  If there is a lower price, that’s not disruption, its lower pricing. The fact is Jio is a big and well-capitalised competitor, with a lot of investments. They will be good for the industry in long term because you will see greater consolidation. But, at the end of the day, we have to win customers. Many years ago, Tata DoCoMo launched, moving from a minute pulse to a second pulse. There was a big change in pricing. But, was it a disruption? I think it was a price change, said Vittal.

Erosion in voice and data: Airtel has seen erosion in both voice as well as data but data has been more secular. Vittal believes data tariff erosion is okay as long as  there data-driven revenue growth.

He said Airtel will focus on retaining its high ARPU customers—those contributing 1.5 times its current ARPU of around Rs 190. And in order to win  against competition, Airtel would target getting more rural customers on board, improve customer experience, digitize internal operations and processes.