Bharti AirtelNSE -0.58 % is open to creating a company with rival Vodafone Idea to jointly own their fibre networks, which could be monetised to raise funds to drive growth as it seeks to regain revenue leadership by March end, senior company executives said.
“We will be delighted to share and create one company. We have already built a lot of fibre with Vodafone Idea and over the past two years, a lot of sharing has happened between the two companies,” a top company official said.
Although the fibre network company offers an opportunity for monetisation, the official said the plan is essentially to co-own it with the competition, along the lines of Indus Towers, India’s largest telecom tower company that is jointly owned by Bharti Infratel and Vodafone Idea.
A Bharti Airtel spokesperson declined to comment on the matter.
Both Vodafone Idea and Airtel are seeking funds for expansion as they recover from intense competition that has eroded earnings and revenue over the past two years in a sector that has now consolidated into three private operators.
Telecom market leader Vodafone Idea, which was formed in August with the merger of Vodafone India and Idea CellularNSE 1.54 %, recently spun off its fibre assets to a wholly owned unit with the intent to monetise it.
Airtel has been selling stakes in tower unit Bharti Infratel and placing shares privately in its Africa business ahead of an initial public offering. The company plans a rights issue of up to Rs 15,000 crore, as reported by ET last month.
Airtel reckons the worst of the competitive pressure — unleashed with the entry of Reliance Jio Infocomm in September 2016 — is behind it. The telco has been able to increase tariffs by small margins in some plans without denting demand.
Airtel increased the price of its Rs 99 plan by Rs 20. “No problem at all – every customer has taken it,” the official said.
The telco has also lured subscribers to higher tariff plans by dangling incentives such as free subscriptions to Netflix and Amazon and both factors will help it increase revenue from the current quarter.
Airtel’s focus is to regain its top slot by revenue market share (RMS) from Vodafone Idea by the end of this financial year.
Vodafone Idea led with an RMS of 32.8%, followed by Bharti at 30.9% and Reliance Jio at 26.1% in the September quarter, according to an ICICI Securities report based on data from the telecom regulator.
Airtel officials said only three rounds of price increases every six months are needed to reach an average revenue per user (ARPU) of? 200 a month and recover from the fall triggered with Jio’s entry.
Source: Economic Times