Changing Market Dynamics

Bharti Airtel had a long history of being a profitable company. We posted our first quarterly loss in 14 years; this was amid a brutal price war unleashed by our competitor and changing consumer needs and preferences. We have the highest average monthly revenue per user (ARPU) in the industry and our services are unparalleled. Also, Bharti Airtel users report highest levels of customer satisfaction. Our services have shown less variation in terms of ticket responses and network connectivity. We have some of the most loyal customers which is why we at Airtel are not worried, about the small setback that we have faced this year. This does not mean that we are ignorant to the changing market dynamics. The industry as a whole is facing the same challenges, it is time that we as an industry try to solve these issues.

Challenges:

1)     Adjusted gross revenue: in October 2019 the Indian supreme court ruled that network operators, including some that are no longer operational, will have to pay to the government within 90 days a combined $13 billion in adjusted gross revenue as spectrum usage charges and license fee. The telecom industry and the DoT (department of telecom) are disputing how gross revenue should be calculated. We are hopeful that the government will take a considerate view in this matter given the fragile state of the industry.

2)     Low cost tariff's: low cost tariff plans introduced by our competitors have forced us to decrease our prices. This reduction in prices has hit our bottom line which clearly reflects in our financial performance. Price wars aren’t sustainable in long run for the company.

Under cutting competition is not a good idea in the services industry companies should focus more on product differentiation. We at Airtel have realised this and therefore we will start normalizing our prices gradually and focus on diversification.

Airtel already trumps all other competition in terms of service quality, timeliness and network coverage. We will now focus more on providing personalized experience to our users and double down on issues that our users face. We are committed to innovate and provide best service to our users.

As an industry we have ignored the rural markets, we at Airtel are committed for INCLUSION of the largely underdeveloped market. We believe that internet is a basic necessity and every individual in this world should have access to these basic utilities. Airtel has already started tapping these markets. We not only provide strong cellular network to a few select areas we also provide broadband network to these areas. The number of villages we reach is constantly on the rise.

With growing demand for data and speed among new age consumers, we have ventured in to 5G rollouts. Currently we are testing our 5G capabilities. We believe adoption of 5G will help boost the economy and reach new heights. It would help our cities get smarter where IoT will would play a vital role.

The opportunities to service our customers and provide never-seen-before experiences for them are many. We are determined to create those experiences for customers. And in the process, we are seeing enormous growth opportunity for Airtel. The spirit is best captured in what one employee told me: it is going to be the best times of our lives!