Airtel aims to roll out 5G pan-India by March 2024: MD Gopal Vittal

Bharti Airtel has set in motion detailed 5G network rollout plans for 5,000 towns with an aim to achieve a pan-India rollout by March 2024 even as it looks to grab more quality customers and boost revenue market share, the telco’s managing director Gopal Vittal said.
At Airtel's fiscal first quarter earnings call, Vittal also said the telco is in talks with several top enterprises for setting up private 5G networks.

“Airtel is well positioned to win the 5G game…we intend to launch 5G services immediately and by March 2024 will be able to cover every town and key rural areas as well,” Vittal said.

This, he said, would be one of the biggest network rollouts in Airtel’s history that would help the telco acquire more quality customers across India.

As more 5G-enabled devices become available and more 4G traffic shifts to 5G, Airtel plans to first refarm mid-band airwaves (read: 1800MHz and 2100 MHz) for 5G and eventually its sub-1Ghz spectrum in the 900 MHz band.

Vittal’s comments came a day after Airtel's consolidated net profit for the June quarter jumped 467% year-on-year, on the back of 4G user additions and higher data consumption, besides the residual effect of the price hikes, boosting its average revenue per user (ARPU).


Airtel’s MD said the telco’s aggressive 5G rollout plans could entail some advancing of capex spends, though estimated spends over a three-year span would stay unchanged.

Harjeet Kohli, joint managing director, Bharti Enterprises, who participated in the call, said Airtel could make residual calls if required to tap into its balance rights issue proceeds to meet any advance 5G capex needs.

Last October, Airtel had raised around Rs 5,247 crore in the first tranche of its Rs 21,000 crore rights issue. The balance Rs 15,753 crore is available when the telco chooses to make the two additional calls. The $700 million from Google has already come following the US tech giant’s purchase of a 1.2% stake in Airtel.

On emerging 5G enterprise business opportunities, Vittal said Airtel is in talks with several enterprises for setting up captive private networks. “We are in multiple conversations to build standalone private 5G networks for large distributed enterprises,” he said.

Private networks contracts will be a key piece of future telco enterprise revenues estimated to garner almost 40% of total 5G revenues. Experts say telcos have a first-mover advantage, post-auctions, over tech players in the private networks game as the government has not given any timelines around direct spectrum allotments to independent enterprises for private networks.

To analyst queries on the next price hike and possible premium pricing of 5G vs 4G, Vittal said Airtel is on course to grow its ARPU to Rs 200 and eventually to Rs 300 arising out of tariff rises. “5G isn’t generating incremental ARPU anywhere in the world, but India is different as tariffs still remain low… so with every tariff hike returns on capital can get better.”

The Sunil Mittal-led telco’s ARPU, a key performance metric for operators, grew 2.8% sequentially to Rs 183 in the June quarter, FY23, helped by the residual impact of last year’s tariff hikes.

“Airtel’s ARPU continues to be significant, ahead of peers and we expect the March ‘23 exit ARPU of Rs 210 for the company,” Goldman Sachs said in a note.

The global brokerage estimates Airtel’s revenue/operating income from its wireless services business to grow at 22%/39% compounded annually over FY22-24, helped by a tariff hike in end-calendar 2022 and lower payouts towards spectrum charges, post-5G auctions. Airwaves bought in the recent 5G sale and future auctions won't attract any SUC.

The Airtel MD also underlined the telco’s conscious decision to give the pricey 700 MHz spectrum a miss, claiming that buying these airwaves would have increased Airtel’s cost per GB by 50% without any tangible benefits.

Vittal reiterated that unlike its competitor (read: Reliance Jio), there was no need for Airtel to buy 700 MHz spectrum as its existing spectrum holdings in the mid-band (read: 1800 MHz and 2100 MHz) coupled with the new 5G airwaves bought in the 3.3 GHz/26 Ghz are adequate to deliver quality 5G services across India.

“Our competition does not have such large mid-band spectrum (holdings)… do remember that if we did not have this large chunk of precious mid-band spectrum, we too would have had no choice but to buy the expensive 700 MHz band,” the Airtel MD said without directly naming Jio.