‘Govt. must act to relieve telecom stress’

Bharti’s Mittal says authorities must ensure survival of at least three operators

Bharti Airtel Chairman Sunil Mittal on Thursday said the telecom industry was under severe stress and added that the onus was on the government to ensure that at least three operators survived.

Mr. Mittal’s remarks assume significance amid reports that cash-strapped Vodafone Idea, which posted a loss of about ₹7,000 crore in the March quarter, has sought a moratorium on the payment of its dues to the telecom department.

“To say the telecom industry is in a bit of trouble is actually an understatement,” Mr. Mittal said. “It is in tremendous amount of stress. I hope the Government, the authorities and the telecom department, all focus on this issue and ensure India’s digital dream remains intact through the provision of at least three operators.”

Bharti Airtel would not hesitate to increase tariffs, provided it acted in concert with others, he signalled. “We have to be mindful of the market,” he stressed.

Mr. Mittal was addressing reporters following the successful launch of another 36 satellites by OneWeb, which aims to deliver connectivity across the United Kingdom, Canada, Alaska, Northern Europe, Greenland, and the Arctic Region.

Pointing out that Bharti Airtel had raised about $12 billion in the last 24 months, Mr. Mittal said the company was now on a firmer footing financially. “We are a very strong company, many times we are underestimated in our resolve. Yes, the company needed more funds given the market situation. And we were timely in approaching the market,” he added.

“I won’t say we were ever worried about the company’s future but yes health did suffer. These five, six years have been brutal, and the result of that is for all to see…10 operators have gone out of business, two merged together… gasping for breath right now.”

“I think the government is aware, and in my assessment they would like to see a vibrant telecom sector,” Mr. Mittal said when asked about the steps the government needed to take to help the sector. “How they do it, what balm they apply to the sector, is best left to the government and the experts… I am very hopeful something should happen.”

Pitching for higher tariffs, Mr. Mittal said, “How long can you keep on killing each other. The point is, when you have a return on capital, even by the best operator, at low single-digit and most of them are struggling… at least come back to old tariffs”.

Mr Mittal pointed out that the industry ARPU at ₹130 currently is way below the pre-Jio ₹220-230 levels and is ‘totally unsustainable.’

On OneWeb, which will face competition from Elon Musk’s Starlink and Jeff Bezos’s Amazon in the satellite communication space, Mr. Mittal said by May 2022, services will go live across the globe, including India.

“In India, we need to build ground stations, one in North India and one in South India. The identification of land has been done. We are now waiting for licences, permission for our landing rights, bandwidth and use of spectrum from Department of Space and the Department of Telecom. We are hoping to get all this done this month hopefully,” he said.

Asked about the competition, Mr. Mittal said the company welcomes competition and there is space for at least 2-3 constellations.

“Our strategy from day one has been to collaborate, collaborate and collaborate. We are not here to substitute telecom companies or fibre or terrestrial radio or even geostationary satellites… we are talking to them to have a joint go-to- market strategy, because they are areas of complementary services,” he said.

Mr Mittal pointed out that the company, OneWeb, has been built 100% virtually. He has met the CEO of the company only once, and no one else has met anybody.

“Will Airtel be the only beneficiary? The answer is no. This is open to every operator in the country. We will love to give this to Jio, we will love to give this to Vodafone,” he said, adding that they are less than 10 months away from global coverage.

Mr Mittal added that the company will need to raise some more capital and there may be some more dilution of the company. Earlier this week, Mittal-led Bharti Enterprises had announced additional $500 million investment in OneWeb via its arm Bharti Global, making it the largest shareholder with a 38.6% stake.

“The global satellite broadband market is more like $35-40 billion. I would say that the global requirement for satellite broadband services is fairly high. In India, we will be able to sell most of our capacity within the first year. The contracts will be with mobile operators, with different defence authorities, with some other strategic parastatal bodies like the forest department or the railways or shipping agencies… discussions are currently underway,” Mr. Mittal said, adding that the company should break even in 24 months from the date of full commercial service.

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