Telecom major Bharti Airtel yesterday indicated that it may cut down on discounts it offers on mobile call rates to push revenue from voice services. Also Read - Airtel vs Vi vs Jio: Best prepaid plans with 3GB daily high speed dataAlso Read - 4G spectrum auction: Reliance Jio comes out as highest bidder, Airtel follows
“There might be ups and downs in certain quarters, but the long-term secular opportunity for raising voice realization remains, given the significant gap between headline tariff and the realized rates or in other words discounted tariffs,” Bharti Airtel’s Managing Director and CEO (India and South Asia) Gopal Vittal said. The first quarter has witnessed a historic trend of softening volumes with respect to voice call segment, he said in the company’s earnings call today. “I will not comment on how it will play up within a given quarter, but what I will say is from longer term basis there is still opportunity to raise voice realisation,” Vittal said. Also Read - Airtel announces partnership with VOOT for premium content on Airtel Xstream
Airtel has reported 60.9 percent rise in consolidated net profit to Rs 1,108 crore for the first quarter of current fiscal ended June 30, 2014 on higher growth from mobile data business. The voice calls accounted for about 72 percent of company’s mobile revenue in India during the reported quarter. The company’s total revenue rose 13.3 percent to Rs 22,962 crore in the reported quarter as compared to Rs 20,264 crore in the corresponding period Though Airtel charges charges 2 paisa per second under headline tariff–call rates without discount– its financial statement for April-June showed that it realized only 38.08 paise from a minute long call.
Airtel also indicated that the company will divest telecom towers in Africa but is looking for suitable deal. “In general, your direction in thought is right. What applies to one country in terms of strategy of letting an expert of tower company to handle assets, energy management associated with it, that thought is uniform across all countries,” Airtel’s Group Treasurer Harjeet Kohli said in reply to expectation of sale of all mobile towers in Africa.
Airtel sold 3,100 telecom towers in four African countries to Helios Towers Africa for an undisclosed sum. The company is now left with about 12,000 mobile towers in Africa. “From our perspective, we will be able to look at other countries, the relevant potential partners in due course of time. At this stage we cant’t say whether it is a two-month activity or 12 months activity,” Kohli said. The company used proceeds from Helios Towers in lowering its debt burden and operational expenses.
The net debt on the company at the end of first quarter stood at Rs 57,744.3 crore. Vittal appreciated recent recommendation of Telecom Regulatory Authority of India on spectrum sharing, but said that certain issued needs to be resolved like point to restrict sharing of frequecies in same band.
“As we go forward, I think, if you are restricting sharing within a band then that could potentially become a constraint because actually 3G can be delivered both in 2100 Mhz as well as 900 Mhz. Similarly, 2G and 4G both can be delivered in 1800 Mhz. So, it cant be within a band sharing,” Vittal said.
The company has announced that it will spend between $2.2-2.4 billion this fiscal in capital expenditure and $800 million out of this has been earmarked for Africa. Airtel will invest the amount in mainly enhancing its 3G coverage and 4G service roll out. The company had over 20.94 crore mobile subscribers at the end of June, 2014 of which 3.93 crore customers subscribed to its mobile internet services as well in India. The overall subscribers base of the Airtel has crossed 30 crore in the ongoing quarter.