wordpress blog stats
Connect with us

Hi, what are you looking for?

4G customers blow through their (data) allowances faster – Airtel CEO Gopal Vittal


In a conference call held with analysts, Gopal Vittal, MD and CEO (India & South Asia) for Airtel spoke about 4G usage trends, data growth, and interestingly, the reasons for growth in their voice business. Note from the concall:

4G usage trends:
– High end customers moving to 4G: Because Airtel doesn’t differentiate between 3G and 4G, high end customers with 4G devices are now consuming significant amount of data are moving to 4G. “…the moment they buy a data pack, we don’t recognize the difference between 4G and 3G, the price is the same, we try and put them on 4G and wherever the network is not there, they fall off on to 3G.”
– They blow through their allowances a little faster: “…this set of customers obviously consumes a lot more data, so probably two to three times what a normal average would be”…”with significantly higher throughputs and significantly higher speeds, these will tend to blow through their allowances a little bit faster. So in the past if a customer was completing his allowance, let’s say, in 30 days, now it gets completed in above 24 days, 25 days, and that leads to one of two things. Firstly, “because they then buy more and consume more”, and secondly, “they start calibrating their wallet, to say, I can’t afford to buy and therefore then they switch it off.”
– Device prices are coming down: “you’re seeing devices at Rs 5,000 to Rs 6,000, a very significant part of the new smartphones coming in are all 4G enabled.

2. Data growth:
– Mostly still small usage: At 58.2 million, 23% of Airtel’s base is using data, and a total of 35.5 million are on Mobile Broadband (3G or 4G). Data contributes 23.3% of mobile revenues as against 17.6% a year ago.
– Broadband usage still for basic apps: “Remember 80% to 90% of the use of data in this country is still around basic applications whether it’s Facebook, WhatsApp and maybe video, and at 1.5 Mbps on a small screen, a 3G network delivers video pretty seamlessly without buffering. So a lot of the demand of video consumption as also social media and other sort of consumption can very easily be fulfilled with the use of a 3G network.”
– Data growing but flattened a little bit: “…the volume growth on data, it is still about 70%, so it’s pretty strong. I think having said all that, there is some underlying concern around the fact that our data penetration on a national basis has kind of flattened a little bit over the last 3-4 months. Our penetration, the way we define a consumer of data is somebody who buys at least 1 megabyte per month and that’s a very low level of data consumption, that number is around 23%.”

3. Four factors that have led to a growth in voice usage for Airtel: Airtel saw voice volumes grow in the quarter ended 31st March 2016: total minutes of usage were up 10.8% year on year, a total increase of 30 billion minutes. This is its highest growth in the last 18 quarters. But what has driven voice growth?

i. Airtel is looking at its geographies in a sharper, better segmented manner: “we do not look at this market as 22 circles. We look at it as 650 districts. and in each of these districts we have got a job to be done, so there are three archetypes that we have created around 650 districts and that is what is helping drive our performance,” Vittal said. “…we monitor the performance of the operation across every single district.”

ii. Focus on quality of customer acquisition: Over the last nine months, Airtel has stepped up its focus on customer acquisition “even as we’ve kept a tight control on the quality of acquisition as also the improvement in the customer experience overall. We’ve seen that flow through in terms of net adds and as a consequence that has obviously driven some of our voice volumes.” Traditionally, telecom operators have chosen to do a landgrab of customers, often without a focus on the quality of customer acquisition.

Advertisement. Scroll to continue reading.

iii. Other operators are struggling: “… one of whom also sort of shutdown operations in part of the country or was in the process of migrating, and we’ve been pretty good at actually picking up a very disproportionate share of port-ins from that context.”

iv. Decongesting the network: “While we have made announcements on what we’re doing on Project Leap and the investments that we’ve made there on 3G as also 4G, but really around 3G. I think the thing that we haven’t talked about much, but has been done very quietly is a very, very great emphasis on our network quality. We have really driven a whole culture of network quality across the last four, five months and that has been predominantly focused around voice to make sure that we are optimizing, we’re putting small pole sites and solutions in congested markets. A lot of focus on decongesting the network and so on and so forth, and I think that has also been a part of the driver of actually driving the overall voice volumes.” Frankly, given that Airtel’s network is still spotty and unreliable in cities like Delhi, this is quite hard to believe.

3. Going to be tough for MVNOs: “I think you must remember that this is a brutally competitive market, there are already eight operators. So for an MVNO to come in and actually operate is going to be quite challenging. So, it’s still early to see how that will play out.”

Note that this is contradicted by his statement that other operators are struggling.

4. On fiber to home: “The number of sites that we have fiber on is a clear ratio based on our own experience on how we’ve fibered. We are fairly healthy in most of the cities, particularly in places like Delhi, Bangalore, Chennai, where we have a sound home broadband business, we have solid fiber on the ground. We have some challenges in cities like Bombay for regulatory reasons and permission to lay fiber and get permissions to trench. We do share fiber, we do share IRUs with some of our competitors, we try and minimize as much as we can in terms of the cost of laying fiber.”


Advertisement. Scroll to continue reading.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



By Rahul Rai and Shruti Aji Murali A little less than a year since their release, the Consumer Protection (E-commerce) Rules, 2020 is being amended....


By Anand Venkatanarayanan                         There has been enough commentary about the Indian IT...


By Rahul Rai and Shruti Aji Murali The Indian antitrust regulator, the Competition Commission of India (CCI) has a little more than a decade...


By Stella Joseph, Prakhil Mishra, and Surabhi Prabhudesai The recent difference of opinions between the Government and Twitter brings to fore the increasing scrutiny...


This article is being posted here courtesy of The Wire, where it was originally published on June 17.  By Saksham Singh The St Petersburg paradox,...

You May Also Like


Airtel and Reliance Jio now account for as much as 65% of India’s total Mobile connections. BSNL has just 10%. While Reliance Jio and...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ