Airtel’s bidding strategy in the spectrum sale next month would be calibrated to acquire pan-India holdings of sub-GHz spectrum that can be deployed for 5G, Vittal said at an earnings call on Thursday. It would also go for renewals in the 1800 MHz band and mop up additional capacity spectrum in the 2300 MHz band, he said.
The key thing is that the existing transport, radio and core elements of Airtel’s mobile broadband network are “totally futureproof ” for quick 5G deployments, Vittal said. “There won’t be any material change in the telco’s capex profile to go 5G” as any incremental capex spends in future 5G deployments would automatically reduce all 4G-related network spends, he said.
“In the short-term, 5G rollouts will naturally happen in the urban areas as (high) device prices would be a constraint since massification takes time, but eventually we will have to offer 5G nationally everywhere, especially since mobile broadband is now an essential service,” Vittal said.
Separately, Vittal said Airtel would “deploy different levers and had a plan in place to counter any potential competition from the much-awaited budget smartphone” from the Reliance Jio-Google combine, but dismissed the possibility of the telco playing the device subsidy game in the lower-end of the market, calling such a strategy value-destructive.
“We’ve consciously stayed away from the device subsidy game as we believe that when customer upgrades happen, they don’t necessarily remain with the telco offering such subsidy at the lowerend of the market,” he said.
Analysts, though, expect Jio to quickly unveil the low-cost Android smartphone with Google to retain and upgrade its JioPhone users, especially after the market leader reported its lowest-ever net user adds in the December quarter despite its tariffs being 7-20% lower than Airtel’s. Airtel’s CEO reiterated that mobile tariffs were unsustainable and needed to rise quickly to take ARPUs initially to the Rs 200-mark, and then to Rs 300, but said the telco would not take the lead as pricing is a competition issue involving competitive dynamics.
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