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Gopal Vittal on Airtel's DTH strategy, TRAI tariff order & overall ARPU growth

Airtel is also building a solid digital layer using data, payments, network and distribution.

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MUMBAI: The uncertainty caused in the cable industry after the TRAI tariff order implementation has helped DTH players gain subscribers. Airtel Digital TV added approximately 391,000 customers in the last quarter of FY2019 reaching a total base of 15.4 million as at the end of March 2019. The Sunil Bharti Mittal-led company sees good opportunity to grow its customer base as a large part of the cable industry is still not digitised but is fragmented. 

“The DTH market is large because there are still about 90 million customers who have cable and terrestrial connections, so there is still a big upgradation opportunity from cable to DTH,” Airtel India MD and CEO Gopal Vittal said in an earnings call after the Q4 results. He added that there has been some uncertainty and challenges of implementing the TRAI tariff order and that may have been one of the reasons for faster acceleration from cable to DTH and stronger customer additions.

After the Q3 results, Airtel had said that the tariff order will help it increase the average revenue per user (ARPU) of the middle segment too. In the long term, Vittal sees the TRAI tariff order as beneficial.

On the broadband side, the company currently has 2.2 million or 2.3 million customers. Vittal said that although ARPU in the segment is marginally down, it has stabilised due to the revision of pricing. He also added that the churn is exceedingly low while stickiness is high here unlike in wireless.

“One of the things that we are looking to do is to further strengthen that stickiness by bringing in other services across our mobile as well as our DTH platforms into the home. We track that very closely and we have a metric that drives that. We are also trying to see what we can do to digitally enable the several services to be sold seamlessly to customers,” Vittal added.

Vittal also revealed Airtel’s strategy to build a solid digital layer using the strength around data, payments, network and distribution. He also noted that through Airtel Thanks, the company is trying to bring all its services, entertainment, music, video and telco benefits together. It also launched a plan with life insurance. The idea is to create an array of services for improving stickiness with customers as well as increased trade up through ARPU.

“Some of the relationships that we have with Amazon or Netflix or Zee enable us to place pieces of content with premium plans and that drives upgradation. Going forward, we could also look at selling many of these services through our payments platform. We recently began piloting it via our distribution app, Mitra, which is used across a million retailers,” he added.

While the capex level was at its peak last year, Vittal assured that it will be lower in the course of this year. But that would not mean any compromise on consumer experience.

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