In an effort to improve its coverage in Karnataka, telecom service provider Airtel has outlined a ₹1,000-crore capex for the State, which contributes around 12 per cent of its total revenues.

Airtel also plans to set up 13,000 new mobile sites this fiscal and to lay 4,500 km of fibre optic cables to augment its capacity at a time when data usage across smartphones is exploding. However, as usage has gone up, customers have been complaining of frequent call drops and slow internet speeds across the country.

Challenges

C Surendran, CEO of Karnataka operations, Bharti Airtel, said it is like a highway where a single car can go even at speeds of 200 km. “When a hundred cars come, the situation changes and the same principle holds true for telecom networks,” he added.

While the network expansion plans look good at the outset, on the ground there are several challenges – from the ecosystem as well as competition.

In the case of fibre optic network, while out of the 4,500 km, 2,000 km is completed, 2,500 km needs approval from municipal authorities such as Bruhat Bengaluru Mahanagara Palike (BBMP). Sources in BBMP have been asking Airtel to specify the the total digging that needs to be done (to lay the cables) as they believe that there is a discrepancy between Airtel and BBMP data. However, Surendran said the company is transparent and has submitted all the detailed plans to the BBMP authorities.

Radiation fears

Then there are challenges from apartment complex associations with regard to putting up mobile towers as people fear radiation emission from these towers. While the scientific community is divided over this, Surendran pointed out that Airtel, along with DoT and IT Ministry, are educating people and have even issued an order that radiation from mobile towers are not hazardous to health.

Competition

Finally, there is competition. While Airtel does not want to say that the launch of Reliance Jio has impacted their business, it is evident from the reduced ARPUs. Surendran stated that 25-30 per cent impact on ARPUs due to price drops caused as a result of “price drops”.

Further, in the quarter ending July, ARPU dipped 6 per cent to ₹109 from ₹116 in the same period last year. Though ARPU decline has slowed, RJIO is still undercutting aggressively, especially the tariffs for feature phones, which would keep ARPU under pressure for the next two quarters, according to Edelweiss analysts Pranav Kshatriya and Sandip Agarwal.

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