Airtel capex to fall sharply as 5G rollout comes to an end
Bharti Airtel’s annual capital expenditure will fall sharply in FY25 and FY26 compared with the record Rs 33,000 crore seen in FY24, as the nation’s second-largest telco has concluded its 5G rollout and won’t be spending extra cash on 4G capacity expansion going forward, its vice-chairman and managing director Gopal Vittal said.
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A strong take-up of Airtel’s 2GB plans — offering unlimited 5G data — is driving data monetisation and the telco would go flat out to accelerate the next round 2G to 4G/5G conversions and even target a potential 80 million top-end prepaid users to go post-paid to ring in the next wave of ARPU (average revenue per user) growth, he said.
Vittal said over the years the gap between prepaid and post-paid rates has shrunk, in that post-paid is just two times that of prepaid — it used to be much higher. If prepaid rates start moving up strongly as in markets like Indonesia, then telcos will in future look to increase post-paid prices too as one can bundle content, do data rollovers on the post-paid platform, he pointed out. Higher post-paid rates typically boost ARPU.
“Airtel’s capex as a percentage of revenue will trend downwards from FY25 and soon be at the level of global peers…this is since our radio (network) capex has decelerated very significantly, and will continue decelerating next year with the completion of the big rollouts, and we’re also not putting any investments in 4G capacity,” Vittal said at the Sunil Mittal-led telco’s fiscal third-quarter earnings
