wordpress blog stats
Connect with us

Hi, what are you looking for?

‘Aggressive pricing is not a response to something that’s free’: Airtel CEO Vittal on Jio

Airtel 4G

Responding to Reliance Jio’s free calls and data offer, Bharti Airtel’s CEO Gopal Vittal said that “we don’t believe that competing very aggressively in pricing with something that is free is actually a response,” while talking to analysts during the company’s Q2 2016 conference call. He added that Jio’s free offer has put some “softness” on Airtel’s data growth in the quarter, and this softening of data growth shall continue for some time.

However, Vittal added that Airtel would be able to maintain its top market share for the next one year or one-and a-half year.

Postpaid users jumping for better deals   

Airtel has witnessed few subscribers leaving its postpaid side. Vittal said that these customers are “more the deal hunters, value seekers…young people, traders and things like that who are switching.” But he maintains that “This is a game we (Airtel) know how to play.”

 “We’ve seen competitors like Telenor operating at half the price of us, Aircel and so on, and I think we have owned this game over the period of the last few years to understand how to individually segment at a customer level to see what kind of a pricing we need to do without spending contingent all around the place,” Vittal mentioned during the call

Vittal predicts that Jio could add close to 40 million connections by end of December with their current rate of subscriber growth, while pointing out that there could be a slowdown “because of the sheer absolute number of 4G devices in India.” He pointed out that some of Jio’s customers could also be using Airtel’s services due to dual-SIM usage. Interesting he claims that Airtel has devised some kind of “metrics” to track this kind of usage on a daily basis.

Advertisement. Scroll to continue reading.

On Airtel’s business strategy to combat Jio: Vittal explained that Airtel is currently concentrating on growing its postpaid subscriber-base, strengthening its retail footprint, simplifying pricing plans, and bettering customer care experience as a strategy to combat Jio’s entry. “From an operational standpoint, we have divided the country into 650 districts and we monitor performance at a district level,” he added.  As their primary business strategy, Airtel’s will focus to attain more market share in terms of revenue; and focus more on profitability rather than margins. “So our target is never margin. Our target is what are we doing on costs, what are we doing on revenue and that is the way we like to think about it,” Vittal said.

On Airtel’s tariff strategy: Airtel has tweaked some of its data pricing, particularly on high-end customers, on postpaid, and on the high value prepaid criteria; “we have not gone all across, because we will wait and do that at a later stage,” according to Vittal.  The 4G market according to Airtel is a smaller part of the market; but however Vittal said that Airtel will look into offering voice+data bundled packs just like Jio, “in a much more aggressive way” but bundled offers from Airtel would be limited to 4G.

On TRAI’s penalty over the Interconnection issue  

Last month, TRAI recommended the DoT to impose a combined penalty of Rs 3050 crore on Airtel, Idea and Vodafone, as they were found to “willfully violate the license conditions” by denying Points of Interconnection (PoI) to Jio. TRAI proposed Rs 50 crore penalty per circle for 21 circles of Airtel However, during the investors’ call Vittal said that the PoI issue is a “non-issue”.

 “We don’t believe this is a battle to fight. This is something that we have done for 20 years. It is a part of our regulatory obligations…we provide points of interconnect and at the end of the day… So this is an absolute non-issue, as far as we are concerned,” Vittal told investors during the call

Regarding Airtel’s network roll out and spectrum deployment

Airtel said that over 94% of its overall spending was aimed at enhancing mobile broadband capacity. The company claims that it now has 4G and 3G spectrum in all circles. Over the past six years, Airtel claims to have acquired spectrum worth nearly Rs 100,000 crore via auctions and trading. It has also upgraded over 9,000 network sites across the country to 4G and claims to have optimized over 30,000 more sites.

Advertisement. Scroll to continue reading.

The company has acquired 20,000 units of Aadhaar based e-KYC solution, with a plan to roll this out in 500,000 retail outlets across the country in the coming months. Currently the company claims to be in “rollout mode”. It is in the process of deploying 3G networks in Kerala. “We will need to roll out 4G quite aggressively in many of the circles where we have traded spectrum. So I think this will continue,” Niranjan Goel Global CFO said during the conference call.

Download: Transcript

Written By

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



The Delhi High Court should quash the government's order to block Tanul Thakur's website in light of the Shreya Singhal verdict by the Supreme...


Releasing the policy is akin to putting the proverbial 'cart before the horse'.


The industry's growth is being weighed down by taxation and legal uncertainty.


Due to the scale of regulatory and technical challenges, transparency reporting under the IT Rules has gotten off to a rocky start.


Here are possible reasons why Indians are not generating significant IAP revenues despite our download share crossing 30%.

You May Also Like


Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...


135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...


Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...


By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

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