Bharti Airtel on Friday said it would shut down its 3G network across the country by December and utilise the same for more efficient technology.
The company on Friday saw its shares surge 6 per cent on the bourses a day after its first quarter results showed signs of recovery in its mobile services. In the post earnings conference call, Bharti Airtel Chief Financial Officer Badal Bagri said, “We now have a plan to pretty much shut the 3G networks across the country by December. So you will see a lot of action in this quarter.” The company has shut down its 3G network in Kolkata.
“We have experimented in Kolkata to really shut off the 3G network, altogether refarm the 900 megahertz, such is running on 3G on LTE that’s worked very well, for us that’s given us a lot of confidence,” Bagri said.
“We have re-farmed spectrum from 3G networks to 4G across both the 900 as well as 2100 bands and begun the process of shutting down 3G networks in India. This has enabled us to deliver improved indoor coverage as well as enhance our capacities,” Gopal Vittal, managing director and chief executive officer, India & South Asia, Airtel, had said on Thursday after the announcement of the company’s first quarter result.
Airtel on Thursday reported its first quarterly net loss in over a decade at Rs 2,866 crore as it continues to battle competition from Reliance Jio.
However, its average revenue per user (ARPU) was the industry’s best at Rs 129 for June quarter on a subscriber base of 320 million.
Also, its mobile services revenue was up 4 per cent year on year during the first quarter. It contributed around 70 per cent of Airtel’s overall India revenue for the quarter.
Analysts see this as a positive sign. Airtel’s continued India mobile growth was the highlight of its results led by a 5 per cent sequential rise in ARPU, noted CLSA analysts.
The company was able to retain its top spot in the market in terms of revenue as its top line was up 2.8 per cent at Rs 15,345 crore. Vodafone Idea posted revenue of Rs 11,269.9 crore in the June quarter and Reliance Jio's revenue was Rs 11,679 crore. Airtel’s India revenue is an integrated number comprising wireless, landline, and broadband services.
During the first quarter of the current financial year, Airtel’s mobile revenues witnessed year-on-year growth of 3.7 per cent. Mobile 4G data customers increased by 63.3 per cent to 95.2 million from 58.3 million in the corresponding quarter last year.
Analysts feel the tariff tweaks by Bharti over the last six months have worked well, which has led to growth in the mobile revenues.
“During Q1, Airtel drove a 5 per cent quarter-on-quarter rise in ARPU to Rs 129, and despite this, it saw a mere 1.5 million subscriber decline,” CLSA noted. It said the telco’s traction in data remained strong — it gained 5 million data subscribers to 120 million, with a data traffic growth of 13 per cent or so sequentially. The average data usage stood at 11.9 GB per month per subscriber, which is ahead of Reliance Jio (11.4 GB) and Vodafone Idea (7.4 GB).
JM Financial analysts, however, felt that a lack of counter to JioPhone together with smaller 4G coverage relative to Jio will remain key challenges.
“Nonetheless, Airtel is making up for these gaps through strong execution — network investments made over the past 12-18 months, smart content bundling and OTT partnerships, and effective marketing, are solidifying perception of smartphone network,” it added.