Airtel to spend USD5bn on networks in bid to squeeze struggling cellcos

19 Sep 2017

Indian mobile market leader Bharti Airtel is planning to invest around INR320 billion (USD5 billion) on network expansion over the next two financial years, the Economic Times writes, citing an unnamed senior executive. Alongside the infrastructure spending, the official said that Airtel would protect its ARPU by withdrawing from the price war initiated by new entrant Reliance Jio Infocomm (Jio), adding that Jio is expected to begin gradually increasing its own prices in the near future. By stabilising its own pricing and expanding and improving its networks, Airtel is hoping to steal three to four percentage points of revenue market share from the smaller operators that have floundered since Jio’s launch, as well as the larger cellcos such as Vodafone and Idea Cellular, and Reliance Communications (RCOM) and Aircel, which are involved in complicated merger processes. Explaining the move, the executive was quoted as saying: ‘The smaller guys are going. [They] are on their knees and dying. Now there’s nothing to merge with revenues declining at 14-15% per quarter … In this period of time, we think there is real opportunity for us to accelerate market share.’

Further, whilst the official stressed that Airtel’s current spectrum holding were sufficient for its plans, the cellco would be open to buying frequencies in the 800MHz either at the next auction or if a trading opportunity arises.