Bharti Airtel reported Sept-10 quarterly results and as expected financial sheet was not good looking. However, you have to overlook the financial for the next 2 or 3 quarters and look at the actions by management, really especially in Africa where it has operations in 16 countries. Excerpts from the Results and Con Call,
- Let me begin with my favorite Topic -The Fat Pipe – Broadband Subscriber base of Airtel Broadband stood at 1.369 Mn with an ARPU / Month of Rs 954. Sanjay Kapoor of Airtel said that the company is now serving majority of the customers with a broadband speed of atleast 512 Kbps. 10,000 Km of 1.4 Terrabit pipe connecting East African Countries.
- Airtel Wireless Operations – With multiplicity of SIM / Mobiles in the hands of consumers, we shift our yardstick to measure the performance to Revenue Market Share for a Telco. RMS of airtel was at whopping 31.2% despite all the Blood Bath in Tariffs.
- Wireless ARPU inched down to Rs 202 from Rs 215 but far better than competitors.
- Manoj Kohli on Why Bharti Airtel ventured into Africa ? Three main factors – Population, Moderate Competition and finally Healthy Tariffs. What Manoj didn’t say and is evident is Sunil Mittal’s hunger for Growth. I remember Mittal saying in an interview that if he gets an opportunity for Telecom business in any other country, he would sacrifice dividends etc for shareholders here and would bid to extend his boundaries. That said, he also knows how to strike the right balance and is evident from the cheap 2% PA loans running into Billions of Dollars extended to Airtel
- Manoj on African Operations – N/W – QoS is improving and new network expansion is underway. Airtel already has 3G licenses in 9 African Circles and they plan to empower Africans with Wireless Broadband for communications. N/W Utilization is moderate and would like to churn into minute factory without disruption in tariffs with innovative marketing strategies and retain premium over nearest competitor in pricing.
- African Wireless Strategies – Airtel is all about Cultural Transformation, Speed of Execution and Entrepreneurship and the challenges they are facing is high labor cost [compared to India] and availability of Talent. Manoj has said that Airtel will surprise the Government and Consumers with bouquet of offers as they will start re-branding and re-positioning in the next couple of weeks. Airtel’s goal is to tailor the business such that they can easily scale it to 100 Mn customers. Employees of African operations are shifted to IBM – IT Outsourcing partners and some to BPO Partners – Tech Mahindra and Spanco Tele marking the launch of BPOs in Africa.
- Tower Business in all the African countries will be consolidated under one entity. In talks with various regulators for reduction in Interconnect charges.
- 3G in India – Licenses in 13 circles. In talks with leading operators to give an Airtel subscriber PAN India 3G coverage by making roaming arrangements. 3G pricing will be determined by the dynamics of the market but Airtel si expected to retain a premium as they do in 2G. Airtel is committed to rollout 3G first and then think about BWA.
- Mobile Number Portability – The biggest Joke in the Indian Telecom Industry – DoT has asked operators to begin the process on Nov-21st with Haryana and complete PAN India by Jan 19th.
Manoj Kohli has sought time for 2 quarters to turnaround the African operations and be on the path of growth. Can they do it ? What say ?