Airtel Will Wait and Watch Jio before Cutting Rates

Taking on Reliance Jio, chief executive officer and managing director of  Bharti Airtel, Gopal Vittal, is of the belief that the telcom will maintain market leadership, since nothing can be offered free for life.

Bharti Airtel will not proactively cut rates, it will wait for Reliance Jio Infocomm’s tariffs to pour in and then they will implement steps to be competitive. However, Vittal further added that Airtel is not obsessed by its competitors, but it is obsessed with customers.

He mentioned that amidst pressures on pricing and realizations because of the entry of Jio, India’s No. 1 telcom is still adding to its revenue market share, and anticipates to gain more in the quarters ahead. He is worried about the rising churn of subscribers—from 2.5-2.6 per cent up to 3.5 per cent in the just ended quarter due to increasing competition which needs to be brought down.

Airtel can cut tariffs further if required to fight Reliance Jio since the latter has rolled out free services for a definite period.

As per Vittal, JIO’s entry would hurt smaller players more and lead to industry consolidation.

Talking about Airtel, the motto is simple. They believe, win customers for life and that drives everything they do. Revenue Market Share is the sole metric that determines if customers are giving you a higher share of their wallets.

Airtel will continue to bank upon its spectrum assets, brand, network expansion and capital expenditure.

The telcom major doesn’t deserve to be fined on the Jio points of interconnection issue. It is talking to both the telecom department (DoT) and the Telecom Regulatory Authority of India (Trai) to provide explanations for the facts. TRAI has recommended a Rs 1,050 crore penalty on Airtel for flouting license conditions by not granting adequate PoIs to the new operator.

Lower price is not disruption: 

If there is a lower price, that’s not disruption, its lower pricing. The fact is Jio is huge and well-capitalized competitor, with a lot of investments. It will prove good for the industry in long term because you will see greater consolidation.

But, the key concern is to win customers. Many summers back, Tata DoCoMo launched, moving from a minute pulse to a second pulse. There was a big change in pricing. But, the thing to be noted was, was it a disruption? It was a price change, Vittal added.

Airtel has seen erosion in both voice as well as data but data has been more secular. Vittal is of the view that data tariff erosion is okay as long as there data-driven revenue growth. Airtel will remain focussed on retaining its high ARPU customers, those contributing 1.5 times its current ARPU of around Rs 190. In order to win against competition, Airtel would target getting more rural customers on board, improve customer experience, digitize internal operations and processes.

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