A day after the TRAI recommended a sharp cut in the floor price for the next spectrum auction, Bharti Airtel MD, Akhil Gupta today lauded the telecom regulator's recommendations.
A day after the TRAI recommended a sharp cut in the floor price for the next spectrum auction, Bharti Airtel MD, Akhil Gupta today lauded the telecom regulator's recommendations. However, in a conversation with CNBC-TV18's Kritika Saxena, Akhil Gupta also talked about his concerns over the lack of reservation of 900 MHz.
Below is the edited transcript of Gupta's interview to CNBC-TV18.
Q: What are your views on the TRAI recommendations?
A: There are some very big pragmatic, positives bold steps. The first one is the reserve price. It is not a half hearted attempt at tinkering, it has been done in a very well thought-out manner.
The second one is the spectrum usage charges being uniform irrespective of wherever it is taken in the auction. Lastly, there’s the recommendation on spectrum rate. Unfortunately, I haven't been able to read the fine print.
What I have not been able to understand is the reason why 800 Mhz and within that, the E-GSM bands have not been put for auction. I am sure TRAI chairman Rahul Khullar would have given some reasons, unfortunately I haven’t read them. So, I can't comment.
Similarly on 900 Mhz, he has mentioned that there should be no reservation. While I haven’t read the reasons, this is contrary to the EGoM decision. The fact that this is not to do with the new recommendations, but is this actually a part of the old license, raises the question as to whether it is an extension or renewal?
That matter is sub-judice. Our claim is it is in extension. I think that part has been ignored atleast in the summary.
A: There are some practical issues involved here. One has to understand that these are existing networks which have been made on a certain spectrum, that has been provided. This is not a switch on switch off method. One cant say that 900 Mhz have been taken off, and you should provide 1800 Mhz.
The whole configuration has to change. I do not know how much of consideration is going into what will happen to rural areas. The rural networks are on 900 Mhz. It is impossible to make them only on 1800 Mhz. So, what would happen is those who have made it on 900 Mhz will not make it on 1800 Mhz they can't. Those who will get 900 Mhz, theoretically speaking, their last priority will be to go to rural areas today.
Q: What is your stance on the upcoming auctions?
A: We still do believe that technically we are entitled to an extension but let's see how the consensus arrives on this.
Q: What are your views on the 3G prices?
A: 3G prices could move down but one has to understand that on data usage, the main question is how one can spread the usage of data across 24 hours. We have to still test it out as to what works, what is the elasticity which works.
Q: The rupee volatility has been a concern across the industry. From Zain's point of view considering you have a heavy acquisition debt on the cards, is there any plan to refinance this?
A: We are at a very comfortable 2.1 net debt to EBITDA which is absolutely comfortable. So, the misnomer is that we have a large debt running into USD 7-8 billion. Hence, it is assumed that we are overleveraged which is absolute wrong.
Since we have taken a dollar debt for acquisition, it is assumed that rupee movement on that automatically affects adversely. This too is an absolutely wrong assumption because if one looks at Airtel, the acquisition debt which we have taken is for acquisition of operations in Africa. Africa is a dollar asset to us. We report the African operations the results in dollars.
I have acquired a dollar asset. I will obviously acquire it with dollars, it has nothing to do with rupees. The only connection with rupee or India is that the Indian parent has guaranteed those debts. As far as India is concerned, my only exposure in dollars in India is about 500 million of debt, that’s it. And this is including the creditors in foreign exchange, at any point of time will be a maximum of USD 700-750 million which for my balance sheet is pretty small.
Q: Are you looking at acquisition specifically from the smaller domestic telecom players?
A: I don’t foresee any big M&A for us in India in the coming period.
Q: In that case what about Loop? Is there any possibility of looking at an acquisition of the company?
A: No, I think they have many issues going on let them sort that out first.
READ MORE ON Bharti Airtel
Set email alert for
ADS BY GOOGLE
video of the day
Go for midcaps in cement space, bullish BPCL, IOC: HDFC Sec