Airtel to invest $2.5b in India this year
In this article (5)
Bharti Airtel has revealed plans to invest $2.5 billion in India during the current financial year as the company seeks to build out its 4G network to improve its dominant market position.
During an earnings call for the company’s recent financial results, Airtel revealed it doesn’t plan to let its 71.7% decline in Q4 profit hamper its growth ambitions.
Airtel plans to continue to focus on acquiring market share despite the impact on ARPU in the short term, Airtel’s CEO for India and South Asia Gopal Vittal said.
The company’s ARPU shrank to 158 rupees ($2.45) during the fourth quarter from 194 rupees a year earlier, largely as a result of the price war triggered by the entry of Reliance Jio Infocomm to the market.
Airtel has been strongly opposed to what it called Jio’s “predatory pricing” practices of offering free services as promotions to rapidly attract new users.
Goppal said India’s smartphone penetration is expected to double in the next three years to up to 700 million, which is set to significantly impact data growth and validate the operator’s decision to focus on market share in the near term.
Airtel also plans to invest around $500 million this financial year to develop its African operations, the report adds.
Questions & Answers
Q.What is the primary reason for Airtel's significant investment in India this year?
What is the primary reason for Airtel's significant investment in India this year?
Airtel plans to invest $2.5 billion to expand its 4G network. This strategy aims to strengthen its leading market position and cater to the expected growth in smartphone penetration.
Q.How has the market competition affected Airtel's financial performance recently?
How has the market competition affected Airtel's financial performance recently?
A price war, initiated by Reliance Jio Infocomm, led to a 71.7% decline in Airtel's Q4 profit. The company's Average Revenue Per User also fell from 194 rupees to 158 rupees.
Q.Besides India, where else is Airtel planning to make a significant investment?
Besides India, where else is Airtel planning to make a significant investment?
Airtel plans to allocate approximately $500 million during this financial year towards developing its operations across Africa. This is in addition to the India investment.
Reader pulse
Airtel's $2.5b investment is:
18,030 votes so far