The Bharti Airtel India CEO says his greatest achievement is the strong team that now runs the telecom firm

The Bharti Airtel India CEO says his greatest achievement is the strong team that now runs the telecom firm

In the two-and-a-half years that Gopal Vittal has been running the India business for Bharti Airtel Ltd, the company has seen a sort of reversal of fortunes: net profit is finally increasing after falling for 15 consecutive quarters. When he joined, most of the top management quit. That, he says, was his biggest failure at the helm of Bharti. Since then, his greatest achievement is the strong team that now runs Bharti, India’s biggest communications service provider, he says. Vittal spoke on the sidelines of the formal launch of the telco’s 4G services across 51 cities, with 296 more to come. Edited excerpts:

Do you see a data tariff war emerging in the near future with the new competition coming later this year?

We respect all our competitors. What we have to do is if we can use this opportunity to improve our business. See if we are more ready and prepared, for any competitor, and are we selling to our customers better. We have been through price wars and if it all comes down to pricing then we will do what we need to. There’s no point speculating now. We will have a competitive business.

But there is a second point that you need to see. Today, if you look at our spectrum profile. We are the only operator with 3G spectrum with a national footprint. 4G, we are in 14 circles; 900MHz which is indoor coverage or 3G, we are in 7-8 circles. So, for spectrum, we are very well placed. In our industry, if a new player comes in creating a large amount of capacity, then all of the players will get hit. So we have to get stronger.

Rolling out in 51 cities like we have announced today—making the call to actually roll out, when there were no devices and for more than a year, there were no devices. Now it seems prescient that the ecosystem is tipping to a point where the device is at around Rs.6,000.

This doesn’t mean that for an operator like us it’s all about 4G. There is still a focus on driving rural coverage, getting new customers on mobile, serving the customers well, driving 3G—this year we are in the middle of a very big roll-out of 3G. Bigger than we have done in the last two years, because we have our own spectrum.

Bharti Airtel is in a unique position you have offerings across the bands—2G, 3G, 4G and even fixed line. Isn’t there a potential for cannibalisation of one by the other? 

If you get over analytical about something, then you lose the plot. You don’t know what you don’t know. For example, our fixed line broadband allows unlimited calling to anywhere in India for Rs.49. There was a lot of worry that voice revenue will fall, at least in that particular vertical. But we still went and did it. Today, we have the highest ever fixed broadband net additions in the last five years. Beyond a point, it’s impossible to measure cannibalisation across businesses. Today what we are seeing is that anybody on a 4G device is giving us much higher average revenue per month than a 3G device. Two reasons for this: the customer getting on to 4G is more affluent and second is that they use a lot more applications.

Why risk being the first mover and give the competition time to learn from your mistakes? 

To be the first is in our DNA. For us, at least, it’s about at what point is the ecosystem ready. We have been sitting on 4G spectrum for five years now. And we have not really been able to monetize it as yet, because the ecosystem was not there. But for the next five years, we believe that this spectrum will be gold. It becomes about placing a bet on the ecosystem and see what happens.

Post all the debates and discussions, have you modified your stance on net neutrality?

We have always said you have to an open Internet policy. Every user should be able to access whatever content they want. Pricing must be transparent. We are only seeing the megabyte. What we are only saying is that voice services need to be level-playing field. You can’t have a situation where as an industry you’re expected to invest Rs.5,00,000 crore in the next 5-10 years and somebody riding on your network not subject to the same rules. They should also be subjected to the lawful intercept rules of the government. Let them contribute to the rural fund, to taxes. The fact is this is a pricing arbitrage between voice and data.

If you see the US, they have data plans that start at $30 a GB. At that price, it doesn’t matter. In India there is a pricing arbitrage between voice on data.

Zero rating is just a marketing plan and it’s not a big deal. If you think we should stop it, then we will stop it. It’s about growing the Internet. That is a non-issue and I think the only issue is being subject to the same rules.

You are using a bit 1800Mhz (FD-LTE) and 2300Mhz (TD-LTE) for 4G in Delhi. Given the number of complaints on quality of service, in Delhi, and the fact that if there is a shortage of space for towers, then is it prudent to be using 1800MHz spectrum for 4G and not continue using it for basic 2G services?

It’s a call to be taken. We are seeing a very rapid decline of call consumption on 2G. The spectrum is getting unutilised and we are seeing rapid growth on 3G. You have to play to where this is going. As more devices move to 4G, there will some relief on 3G. The misconception is that most of the voice is on 2G, but it’s actually on 3G.

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