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COVID-19's Second Wave to Delay 5G Auctions: Gopal Vittal

Separator

The second wave of coronavirus will most likely cause a few months delay in the upcoming 5G auctions, according to Gopal Vittal, Chief Executive Officer (CEO), Bharti Airtel.

Due to which, Bharti Airtel, India’s second largest telecom operator, expects the Department of Telecommunications to currently halt the auction from December to early next year, as to further prevent the pandemic from affecting the economy.

“We were under the assumption that auctions would take place by the end of December. This is what was said to us in a formal manner. With the pandemic that has struck us, I believe this will be delayed by a few months,” said Vittal.

Given the current situation, he believes that technology is not far from reaching the Indian shores, especially with the way in which 5G device deployments are happening.

Vittal stressed on the fact that how Airtel has experienced the second wave’s impact on a large scale coupled with a lot of employees who were not spared as well.

Another impact has been made to Airtel’s business witnessing financial strains as a lot of immigrants are packing bags to their hometown consequently affecting the loss of income and livelihood. To which Vittal explained, “some of them are consolidating their SIMs – using one SIM for the entire family or maybe the wife and the child”.

Thirdly, the impact of consumer acquisitions caused by the limited number of times consumers visit the stores. Overall affecting the businesses, Vittal described how the company awaits the situation to improve in the coming months, similar to how the situation got a little better with the markets opening up last year.

“Nearly 90 percent of India is on lockdown, with the remaining 10 percent either on night lockdown or on weekend lockdown. We are really in a state of lockout, with a significant decline in economic activity. Given the softness we saw in April, we are currently planning for a possible rebound as markets open up”, he added.

Currently, the company is focusing on business continuity, to which Vittal assured that it’s doing so through alternative channels like chemists, grocers and online, which is meaningful as the company draws about 65 percent of its revenue from those channels.

“Previously, it was expected that the auctions would take place by December this year”, Vittal said, adding that the pandemic could trigger a delay of a few months.

Most recently, after accounting for the adjusted gross revenue (AGR) payment owed to the Central government, it posted a consolidated net profit of Rs.759 crore in the fourth quarter of 2020-21.

“During the quarter, the company continued to recognize its AGR obligations in respect of license fees and spectrum use charges based on the court judgement and guidelines or clarifications obtained from the department of telecommunications”, said the company.

The average revenue per user (ARPU) of the company was Rs.145, according to the matrix that measures revenue produced per unit or subscriber. It's India market generates more than 70 percent of the company's sales, with mobile accounting for roughly three-quarters of that.

Improved realizations and solid customer additions boosted mobile sales by 19.1 percent year over year.

The company's 4G data subscribers grew by 31.5 percent year on year to 179.3 million, with 43 million added in the last four quarters. The average monthly data consumption per data customer was 16.4 gigabytes, while monthly voice usage was 1,053 minutes.

“Previously, it was expected that the auctions would take place by December this year”, Vittal said, adding that the pandemic could trigger a delay of a few months.

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