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Airtel-Telenor to expand home broadband to 2 mn

For long run, the company is highly optimistic about the home broadband segment.

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MUMBAI: Airtel’s acquisition of Telenor will provide the broadband business a boost. As India is an under-served market in broadband, the company is planning to expand its home pass footprint to 2 million in FY19.

“For us, last couple of years we have been rolling out about 500,000 to 600,000 home passes. This year, our plan is to step it up to close to 2 million. We have begun this quarter in a slightly slower wicket, it takes time to ramp up, getting clearances and permissions and all. So you will see a step-up in our broadband, home broadband investment during the course of this year,” Bharti Airtel India CEO Gopal Vittal said.

The company will also be looking at replacing in the marquee areas wherever they are in copper right now, to convert that into fiber. So that could be another 1 million-1.5 million home passes while all of it is planned in the next three, four to five quarters.

Though APRUs are in constant pressure in the segment, the company thinks in long run this is an extremely profitable business to be in. In the home business segments, the company’s focus generally is highrises where the cost of rollout and capex is substantially lower than a flatbed. Moreover, it goes only for marquee flatbeds. Hence, the company is highly optimistic about this segment despite Jio’s recent GigaFiber rollout.

In May, Department of Telecom’s (DoT) final nod completed Bharti Airtel and Telenor India’s fruitful merger and the company has net added 28 million customers from the acquisition. Though the overall number was approximately 31 million, it has lost 3-3.5 million customers, purely on account of dual simming or any other reason. While Reliance Jio’s entry in the market and ongoing tariff war has made the competition tough for the company, the merger may help it to stand in a better position.

Vittal said the merger was very well planned. On the network side addition, the company knew exactly which site it needed and did not as there was no point of having a duplicate network. “The first 30 days (after the merger got approval), we actually shut off three circles. And then the next 30 days, we shut off another couple of circles. And we are now left with just one circle, which will be shut down very soon,” he said.

Following DoT also nodded to Vodafone-Idea merger, the telecom industry in India is heading to a three players market largely. Vittal thinks the company is reaching a point where all the players are getting larger by the day. “There is a strong possibility that at the low levels of pricing, which are clearly sustainable in terms of return on capital and all the investments that have gone into the industry, also the fact that just an incredible amount of allowances that are being given to customers, I think some of this has to correct,” he commented.

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