comscore Airtel says price war could have an impact on its revenue
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Airtel says price war could have an impact on its revenue

Airtel, which is one of the major bidders in the upcoming spectrum auction, has said that the company does not require a lot of spectrum right now. Airtel confirms their strong hold of spectrum in the market right now but expects an impact on its revenue in case of a price war.

  • Updated: July 29, 2016 12:50 PM IST
airtel-4g-services

Ahead of the spectrum sale in September, Airtel has said that it does not see “great need” of mobile airwaves at this point. Airtel, which was one of the major bidders in previous auctions, however, sees some impact on its revenue in the case of a price war with the impending launch of much-awaited Reliance Jio services. “When you look at our current spectrum holding, we are in very solid position. We need spectrum to fill few gaps here and there. Broadly from spectrum perspective, we don’t see great need of spectrum at this point of time,” Bharti Airtel MD and CEO for India & South Asia Gopal Vittal said in an earnings call. Also Read - Airtel 5G service rollout: Airtel and Tata Group partner for Made in India 5G network

Also Read - Jio maintains lead in 4G download speed, Vi in upload in May: TRAI

Also Read - Airtel launches new Rs 456 prepaid plan: Check data, validity, call and other benefits

In the last spectrum auction conducted in March 2015, Airtel was the second biggest bidder after Idea Cellular with total commitment of around Rs 29,130 crore. The auction fetched government the highest ever revenue of Rs 1.1 lakh crore. The government plans to conduct the largest ever spectrum auction in September in which 2300Mhz of telecom frequencies worth Rs 5.66 lakh crore will be put on the sale. The auction is expected to keep the balance sheet of already highly leveraged operators under pressure with the government fixing the base price of various spectrum bands, including the premium 700Mhz band, at higher rates.

Government expects revenue of about Rs 64,000 crore from spectrum auction this fiscal. Besides buying airwaves through auction, Airtel has bought spectrum from various telecom operators like Aircel, Videocon, Augere which can be used for 4G services. Commenting on expected data tariff war with the entry of Reliance Jio, Vittal said, “If rates come down then it will have impact on our revenue but we are determined not to let that happen.”

ALSO READ: Airtel offering 67 percent more data to prepaid users in Tamil Nadu

 

He said that the price of smartphone is primary barrier in getting more people to use data and second is awareness among masses on benefit of internet usage. “If you have something which is dramatically useful then people are willing to pay for it,” Vittal said. He ruled out getting into sale of mobile phones like Reliance Retail’s LYF but said that company will continue offering bundled data scheme with smartphones.

ALSO READ: Airtel s net profit for Q2, 2016 drops by 30.8 percent to Rs 1,462 crore

Vittal also said that the company has no plans as of now to deploy VoLTE which means voice calling service on 4G network as its legacy network is delivering good voice call quality. Mukesh Ambani-led Reliance Jio is offering phone calls on VoLTE network which is very advance version of calling from internet.

 

ALSO READ: CCI seeks spectrum trading details from Airtel, Reliance Jio

Bharti Airtel posted around 31% decline in consolidated net profit at Rs 1,462 crore for the first quarter of 2016-17 mainly due to high capital expenditure and loss from foreign exchange during the period. The company saw support from consolidated mobile data revenues at Rs 4,640 crore which grew by 34.1% on year-on-year basis. Shares of the company closed marginally down at Rs 372.10 on BSE.

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  • Published Date: July 29, 2016 12:45 PM IST
  • Updated Date: July 29, 2016 12:50 PM IST



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