Glad to see Vodafone Idea raise money; India to benefit from 3 strong private telcos, says Airtel's Gopal Vittal

Gopal Vittal

Bharti Airtel managing director Gopal Vittal has said India will benefit from three strong private telecom providers operating in the country.

“As far as the industry structure is concerned, I'm glad to see that Vodafone Idea has raised money and I really wish them well. I think India will be well served if it has three operators -- three good, three private operators working there,” Vittal said during an earnings call on May 15.

Vittal said India has been a “brutally competitive” marketplace ever since Airtel has been around.

“So ups and downs keep happening…whether we need to push harder, we are pushing hard every day. So this is an ongoing effort. It's a volatile market sometimes, but you just need to be at the top of your game in terms of execution to continue delivering sustained performance,” he added.

Vodafone Idea’s fully subscribed Rs 18,000 crore follow-on public offer (FPO) and other fund-raising plans would give the debt-burdened telecom operator enough firepower to compete with Reliance Jio and Bharti Airtel.

After the FPO, Vodafone Idea is confident of raising Rs 25,000 crore through debt. The telco’s focus on its planned capex for 4G expansion and 5G rollout, which will help arrest subscriber churn and ring-fence premium, high-paying customers in priority markets.

Analysts also believe that Vodafone Idea may benefit from being a late entrant in the 5G market, learning from its bigger rivals that have already rolled out pan-India 5G networks.

Vittal told investors in the earnings call that tariff “repair” needs to happen across the industry. The ARPU level for the company is over Rs 200, while the right level should be Rs 300, even then would still be the lowest in the world.

Vodafone Idea is optimistic about the industry taking tariff hikes sooner after the Lok Sabha elections, which it believes are imperative for the industry, given the significant network and spectrum spending, the company’s management recently told analysts.

VIL’s management views tariff hikes as a necessity for the industry, with all players making insignificant RoCEs.

Q4 report card

Bharti Airtel reported a consolidated net profit of Rs 2,072 crore for the March quarter of the financial year 2023-24, down 31.1 percent from the year-ago period.

Its consolidated revenue came in at Rs 37,599 crore, up 4.4 percent from the previous year, impacted by the devaluation of African currencies during the period, particularly Nigerian Naira, the telecom operator said a day earlier.

The stock ended the day at Rs 1,316 on the National Stock Exchange,  up 2.47 percent from the previous close.

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