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Bharti Airtel’s CEO & JMD Manoj Kohli On 2G, Price Cuts, LTE, M&A, Rural Content

At the India Telecom conference organized by FICCI and India’s Department of Telecommunications, Bharti Airtel CEO & Joint MD Manoj Kohli spoke about a number of issues facing the telecom sector. A summary of his talk, the Q&A with the audience and reporters after the session ended:

On TRAI Guidelines Regarding 2G Spectrum: TRAI & DoT should look at the report submitted by the spectrum committee and build a long term roadmap for 2G spectrum reaches 1 billion subscribers. It’s important the the voice need for Indian customers should be met. There is a lot of pressure on quality and new capacity required, because voice usage is increasing well all over the country. So a long term roadmap for spectrum allocation in an orderly and level playing field fashion is necessary. Voice will grow for 3-4 years. Across the globe, telecom operators have 17MHz, while in India it is -8MHz of spectrum. This puts pressure on carriers. 3G will be used for voice, because of the voice efficiency it brings in. Capacity left for data is low. We have made 3 appeals to the government: Firstly that the 3G auctions should go according to plan. Secondly that they should release 5MHz more later, and thirdly that we need a roadmap for 2G spectrum for the growth from 500million to 1 billion mobile customers in India.

CapEx Requirements For 3G rollout: We’ll share when we are ready

On 4G & LTE: It’s too expensive at this time, and I don’t think the Indian consumer can afford 4G devices. We are keen that through WiMax, Indian customers get wireless broadband

Overseas Acquisition On Hold? For How Long: Bharti Airtel has put its plans for overseas acquisitions on hold. We’ll get back to you on this.

Rural Customers: rural customers are tech savvy. Our highest electronic recharge is from Bihar, which is considered a largely rural state. Our highest consumption of VAS is in UP. Consumers are ready, and 3G should go into Rural areas. However, telecom operators need to build rural friendly and vernacular content over the next 12 months.

More than Rs. 24,000 crores are lying in the USO fund and they need to be utilized. The government had a major role to play by way of a conducive policy in line with the Chinese government policy which provides free land for building telecom towers, subsidized power and construction of roads. It was imperative to leverage and capitalize on government’s development initiatives, especially for optical fibre laying for broadband bandwidth, and leveraging of the deployed infrastructure for non-telecom usage, viz. electrification, education, mobile health and financial inclusion.

Ready For Addition Of Another Digit To Numbers? The technical teams are studying the addition of an other number in the numbering scheme. We’ll share the timeframe for it.

Scope for more price cuts: India telecom has reached unprecedented levels of affordability, it’s the best in the world at 1c or lower than 1c. The next round of affordability should come from the high taxes and levies – of around 30-31 percent. Globally these taxes are very very low. We want to continue with the policy of forebearance, and competitive forces do take care. The only thing is that the regulator should look at predatory tariffs, which are lower than costs. Tariffs have to be sustainable in the long term.

Mobile Number Portability: We are ready for number portability, whenever TRAI and DoT want us to execute. But I understand that some of the operators are not ready. It has to be an industry-wide launch, when all players are ready. I can’t share how we are planning to deal with MNP.

Subscriber Addition In November: Bharti Airtel has had stable growth, and we expect to continue that.

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