How Airtel Is Standing Strong Among The Falling Army

Business has been nightmarish for incumbent operators ever since Reliance Jio made an entry to the Indian telecom space. All the big Indian telcos – Bharti Airtel, Vodafone and Idea Cellular – have reported heavy losses in their quarterly as well as annual earnings. The primary reason for this is the loss of revenue from voice businesses – the mainstay of these operators’ earnings – which was snatched away by Jio with its free calling service. As if that was not enough, the Mukesh Ambani-led firm also brought down the price of per-GB data to an abysmally low level – at almost Rs 3.

So, for incumbent operators who used to pocket 70% of their revenue from voice and almost 30% revenue from data business, lost the plot with just a single stroke. Adding salt to the wound, the OTT players like WhatsApp, Skype and Viber, were already eating away what is left in the voice business.

While many telcos in the Indian telecom industry succumbed to the pressure – some by closing down businesses and some by selling themselves to others or getting themselves merged with a bigger entity, Bharti Airtel, however, is standing strong among the falling army. Not only that, it was busy building its secret weaponry, stealthily yet steadily to counter the negative impacts of the new operator. One of these weapons is building improved business cases for international customers by offering renewed voice and data services.

The New Airtel Eyes The Global Revenue

Though Airtel has always been an international player, with presence in 16 countries, over 400 million customers, a formidable NLD and ILD network, and a robust undersea cable system, the operator, however, became little more serious about the global revenue just a year back. And the current year is full of developments around that. The operator is busy augmenting its voice and data portfolio for its global customers.

Data Business

In March this year, Airtel acquired the Gulf Bridge international’s India submarine cable system. This acquisition will improve Airtel’s submarine cable system as it now has large capacities – owned and leased – on multiple international submarine cable systems and offers the maximum number of routes between India and Europe. GBI’s cable asset will complement Airtel’s existing global network viz. IMEWE, EIG, SMW4 and MENA and add significant long term bandwidth capacity, enabling it to serve the booming data demand across emerging markets like India and Africa.

Again in August, Bharti Airtel has signed a pact with Egypt Telecom, a major telecom operator in Egypt, to augment its global submarine cable network. This will help the Indian operator in catering to the demand for dedicated high-speed, reliable data services to its global customers. With this, Airtel will be able to further diversify its global network to serve the massive growth in demand for data services, particularly in emerging markets across South Asia, Africa and Middle East, while also benefitting from the favorable economics of Telecom Egypt’s existing wide cable systems network.

As fresh as in first week of August this year, the operator launched a new service platform for its global customers – Bandwidth on Demand, which will enable the global customers to efficiently manage their bandwidth requirements in real-time.

The platform offers quick activation to access, configure and monitor bandwidth requirements and gives full control to the users to provision bandwidth whenever and wherever they need it. With this platform, customers will have the flexibility to opt for bandwidth on an hourly, daily or monthly basis their unique business needs providing greater operational efficiency and tighter control network costs.

The digital platform will be available at 19 locations including Los Angeles, New York, London, Marseilles, Dubai, Hong Kong, Singapore globally and Airtel’s Data Centres and Landing Stations in Delhi, Mumbai and Chennai in India. It has been built on Airtel’s robust global network spanning 250,000 route kilometres across 50 countries and 5 continents, carrying 10 terabits/s international bandwidth lit capacity.

Voice Business

Traditional voice has lost its sheen as a revenue generator in the current all-IP enabled services market, also profit is decreasing because of reducing termination rates. The traditional voice and SMS business are fast being replaced by VoIP and VoLTE which offer tremendous new opportunities for telecom operators across the globe.

A research report by BICS predict VoLTE services with international traffic are expected to grow by a CAGR of 99.3% over the next four years to reach 133 billion minutes by the end of 2020. The Indian telecom behemoth is not oblivious to this.

In May this year, the operator opened a digital platform to sell wholesale voice to global carriers. Using the new platform global carriers can buy voice termination services from Airtel as well as sell them to their target markets on real time. Airtel has partnerships with over 1200 global operators – of varying sizes – thus offering a lucrative wholesale voice business. Its not that Airtel was not offering this service earlier, its just that the operator became more aggressive now.

According to some reports, global wholesale voice business is expected to reach $90 billion in a years time – by 2019. The Sunil Mittal-led firm’s focus is bang on target.

While revenues from voice and data business in the domestic market would remain almost similar for all the surviving telcos, the operator that focuses on global as well as other data-centric revenues from non-telco activities, would be able to sustain in the long run.

Also Read

Leave a Reply

%d bloggers like this: