Bharti Airtel to focus investments on 5G despite limited monetization, says Gopal Vittal

"There is limited monetization on 5G, but we see it as an overall return of the business. So today, all the capacity investments are going behind 5G and we have stopped investing on any capacity investments on 4G," Mr. Vittal announced this during the company’s Q4FY24 earnings conference.

He emphasised that free 5G data plans offered by major competitors are creating challenges in the development of the business as a whole. The tariff repair in the telecom industry boosting return ratios should also be considered, regardless of the technology used.

"It is a competitive market and we have responded to what is happening in the market place and hopefully at some point, we will see if sanity prevails," said Vittal.

"...the architecture of pricing in India is quite broken because people who can afford to pay a lot more are paying a lot less simply because of these unlimited plans, which are effectively a one-size-fits-all plan. If you look at markets like Indonesia or Thailand or any of the markets in Asia, you'll find small, medium, large, extra large, and there's a pathway to monetization. That unfortunately is not the case in India, but this is not something that we can do alone. This needs to be something that we would be happy to follow if this happens," said Vittal.

Q4 results of Bharti Airtel:

The consolidated net profit of Bharti Airtel declined 31% to ₹2,068.2 crore in Q4 FY24 as compared to ₹3,005.6 crore in the year-ago period. Bharti Airtel reported a consolidated revenue from operations of ₹37,599.1 crore in the March 2024 quarter, up 4.4% from ₹36,009 crore in the year-ago period, according to an exchange filing. The company's earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at ₹19,590 crore in Q4 FY24, while EBITDA margin was 52.1%.

At 09:58 AM, shares of Bharti Airtel traded 3.22% higher at ₹1,352.10 apiece on the NSE on 16 May, 2024.