365telugu.com online news,Mumbai,MAY18TH,2021:Good afternoon, ladies and gentlemen. Thank you for joining us today for this webinar to discuss our results for the fourth quarter ended 31st March 2021, which we announced yesterday. Present with me on this webinar today are Badal, Harjeet and Komal.We are passing through a devastating second wave of COVID as you all know. Our communities and the customers we serve have all been profoundly affected. Within the company, too, over the last 45 days, we have seen almost 12 per cent of our people go down with COVID – that is almost 5 times more than we saw in September 2020. Sadly, we have lost 13 of our colleagues as well.Yet in spite of the difficult circumstances, our teams have demonstrated commitment to Airtel’s overarching purpose of serving our customers and the country. Nothing makes me prouder than to be leading this amazing team.Every day I come across inspiring stories. Let me share three.
In Mumbai, when every other service provider refused to install a broadband connection in the home of a COVID positive customer, the team of Manoj and Sanjay from Airtel donned their PPE kits, followed the strictest of safety protocols and did it. And, Sarfaraz, a store executive in Lucknow, didn’t just home deliver a SIM but also organised urgently required medicines for the customer’s pregnant daughter since the family could not step out. Or Manoj fromMumbai’s Fault Management team, to ensure that no customers were inconvenienced, worked on a war footing to repair a site inside a residential society, even though it was a containment zone.Each of these employees were committed to our purpose. For us, it is a matter of pride that we provide an essential service. In fact our service is the oxygen for the digital platforms that are enabling customers to work, study, consult doctors, help others and be entertained.Now to our performance.In the fourth quarter, we delivered yet another quarter of strong performance. Our consolidated revenues grew sequentially by 2% while the underlying India business grew by 3.4%. Our consolidated EBITDA margins for the quarter were at 48.9 percent compared to the preceding quarter of 45.9 per cent.This consistency in performance can be seen across the board in every part of our portfolio. As a result, we have once again grown revenue market share in each of our businesses.
Our business is driven by a simple strategy. A relentless obsession with customer experience and a razor-sharp focus on quality customers. There are four additional enablers to these choices. The first is digitising the core to improve experience and eliminate waste. Second, modularising these capabilities to drive new revenue streams through products and partnerships. Third, bringing together the power of Airtelthrough a unified customer view and integrated channel approach. And fourth, doing all of this with financial discipline while waging a war on waste. This strategy is the thread that ties all our businesses together and creates alignment and cohesion across teams. Let me now comment on each of our businesses in the portfolio.
Let me start with Airtel Business.
Here we continue to gain market share not just annually but quarter on quarter. In fact as per Frost and Sullivan from a 23 percent revenue market share in December 2018 we are now at 31 percent share in December 2020. This represents an 8 percent share gain in two years. We have now closed the year with an annual revenue run rate of $2 billion. The fact is that only 20 per cent of our customers contribute to 80 per cent of our business. So there is a massive opportunity to go both wide to grow share to tap into the 80 percent. There is also a big opportunity to go deep with the 20 percent to gain higher share of wallet. So wide through hunting and deep through farming.To tap into this opportunity, we are re-tooling our channels as well as our product portfolio. We are doing four things. First, in sourcing our entire SME sales force, which was earlier outsourced. This will lead to upgradation of our SME channel capabilities helping us gain share. Second, we are building our omni-channel digital capabilities. Today, more than 95% of the new orders for the product lines where we have begun this effort are coming through digital channels. This will also help us also expand reach and gain share. Third, we have entered
adjacent areas so we can go deeper with our customers to farm more effectively. These new areas include Data Centres, Airtel secure, Airtel IQ and Airtel Cloud. All of these are building traction and are helping us grow share of wallet. This quarter, we also launched Airtel IoT. Airtel IoT is an integrated and end-to-end platform with the capability to connect and manage billions of devices and applications in a highly secure and seamless fashion on Airtel’s 5G ready network. Finally, our teams have now been given differential and separate targets and incentives for both hunting and farming. This will also allow us to meet our twin objectives of growth in share and growth in share of wallet.
Now to our Homes business.
The Broadband business has grown to 3mn+ customers on the back of strong demand for home broadband. During the quarter we expanded our footprint rapidly to new towns and cities through our unique LCO partnership model, adding 1mn+ home passes. We are now present in 200+ cities.As a result, our net adds this quarter at 274K have been the highest ever. In our DTH business, we have now become a clear Number 2 in the market. From a revenue market share of about 22 percent in December 2018 we are now at 27 percent share in December 2020. We have in fact outpaced all other players in terms of performance consistently over the last 8 quarters.With full ownership of the DTH entity, we have even more flexibility to drive this business. As a result, we have nowcombined our large Mobility distribution system with DTH to create one Mass Retail Channel which will drive all businesses – Mobile, DTH and the Payments bank. This should give a fillip to our DTH business. A second thing we have done is to have a dedicated channel for high value homes. We believe there are 50 million high value homes in India and we already have relationships with over 30 million of them through at least one of our services – Post-paid, DTH or Broadband. Bringing the full power of Airtel to the home by bringing all our services together for the customer is an opportunity waiting to be tapped into. As part of this, we now take one view of the customer and have one integrated channel strategy. As a result, we have combined our 2000 retail stores along with our broadband sales organisations and created one integrated Direct to Customer Channel. This channel now delivers and install all Airtel services in the Home. The unit around which this whole channel revolves is our Store, the owner of the micro catchment.
Let me now turn to Mobile.During the quarter, we acquired precious spectrum. We now have a pan-India footprint of Sub Ghz spectrum that will help us cover an additional 90 million customers in India. We have also substantially strengthened our mid-band spectrum. bands. This will help us to continue delivering the best network in India as far as customer experience is concerned. In fact, I am pleased to say that within the country we have 33 percent of liberalized spectrum, the strongest holdings in India. Much of this spectrum can also be seamlessly re farmed for 5G over time. We have also accelerated our coverage.footprint in the quarter by adding 8300 sites. We have also substantially strengthened our transport network as we ready ourselves for a 5G roll out.Based on our estimates for Quarter 4 and we believe we have gained market share and are at a new lifetime high.This performance is on the back of strong 4G net adds at 13.7 million. In fact, over the last year we have added 43 million 4G customers to the network and 1.9 million net adds to the post-paid segment. This has been driven by our focus on experience. In addition we are raising our execution bar by sweating our assets on the ground. We do this through a combination of smart deployment based on data science and Go-to-market efforts that consider our unit of performance at an individual site level.
During the quarter, the reported revenue & ARPU have been impacted by a combination of the the move to the Bill & Keep regime as well as fewer days. For ease of comparison, we have reported all numbers on a comparable basis to reflect the underlying trends in the business. Based on this, our mobile revenues grew sequentially by 4.2% and ARPU moved up from Rs 146 to Rs 148 on an equated day basis. While this ARPU is the highest in the industry it also shows the massive head room for ARPU growth. I say this for two reasons. One is the very low level of tariffs in India. The second is the fact that we have 140 million users on our network who are not on 4G and whose ARPU is less than half that of the average of the business as a whole.
Now to our Digital platforms—-
We have reached a significant milestone at 200 million MAU. Wynk has 72.5 million. Airtel Xstream has 37.5 million. And Airtel Thanks has 96.3 million.As I have said before, we have a 3 pronged digital fly wheel. First, it allows us to get more efficient and deliver a better omni-channel experience on the core business. Second, it allows us to build new revenue streams on our core foundational strengths of Data, Payments, Distribution and Network. Finally, it allows us to create an ecosystem of powerful partnerships that leverage these foundational strengths. A quick word two of our digital businesses.Airtel Payments bank is now rapidly gaining scale. We already have 54 million active users and a monthly throughput of around 22000 crores. Our distribution footprint is across 290000 outlets. There is great synergy between the bank and Airtel – after all customers who have an Airtel Payments bank account with us see a lower degree of churn. On a standalone basis, we are on the road to profitability and we expect to achieve that in the next year.During the quarter we also launched a first of its kind innovation ─ ‘Airtel Safe Pay’ to differentiate our bank even further. Airtel Safe Pay leverages Airtel’s core telcos’ strengths to provide the highest level of protection to Payments’ bank users from potential online frauds. We have also announced an attractive 6 per cent interest rate on savings account deposits of over Rs 1 lakh.
This quarter, we also launched Airtel Ads. Airtel Ads is a brand engagement solution that allows brands of all sizes to curate consent based and privacy safe campaigns to one of the biggest pools of quality customers in India. This is a massive and growing market. In the Beta phase itself we have worked with over 100 brands and are beginning to clock meaningful revenues.Finally, I want to touch on three additional pieces of information.First, on our balance sheet. We are now in a far more improved zone through an optimal capital structure and well- timed fund raises. We raised almost $12bn in the last few years and have also recently refinanced high cost debt at attractive rates. Despite the AGR liability, leverage at 2.95 is comfortable vs. global peers. If we break down the overall debt, DOT and AGR debt itself account for ~56 per cent. In addition, accounting leases contribute to ~19 per cent of the debt. It is also heartening to see that our investments such as Bangladesh & Africa are now becoming attractive. Our new corporate structure, we believe will also help us sharpen our focus in driving our different businesses – India, International, Infrastructure and Digital.
Second, we have successfully monetised some of our assets including Airtel Money & Tower assets in Africa. In addition, we have also monetised the unutilised 800 MHz spectrum in 3 circles in India by entering into a trading arrangement with Reliance Jio.Third, let me also provide some updates on our ESG initiatives.On our environmental impact, we are aligned with the Paris Climate Accord. We have proactively implemented clean fuel-based power solutions for our towers, data centres, switching centres and other facilities. We commissioned a 14 MW captive solar power plant shortly after the quarter ended to meet the energy requirements of our core and edge data centres in Uttar Pradesh. Another similar plant is expected to be commissioned in the coming months.On the back of all these initiatives, we aim to meet more than half of our FY22 power input through renewable energy sources.. In fact, over the last few years, we have reduced our carbon emission per Terra byte by 78 per cent against a self-imposed target of 80 per cent.Sustainability is a mission critical priority for us, especially since we are in the business of delivering an essential service. Every day, over the period of this pandemic, along with the Airtel Management board, I take stock of the health of each of our employees who have been impacted.
There are several things we have done in the last few months to confront the challenges of the pandemic. We have stepped up both life insurance and medical reimbursement. We now have 26 doctors on our in-house panel to allow employees and their families access to medical advice. We provide access to Oxygen concentrators and access to hospital beds where possible through our Covid Care team. There are stress andmental health counsellors that help relieve people of challenges as they face a new normal. Almost all our support staff work from home. We are also rolling out an extensive vaccination program for all employees and associates/partner employees in partnership with Apollo. Here, our priority will be to first vaccinate our frontline teams – network engineers, installation and fault repair staff, store executives – who are out there helping us serve customers in these difficult times.Finally, we continue to raise our standards of transparency in reporting and governance. Let me give you a few examples.
We always re state our numbers in the event of any major changes whether regulatory or otherwise. We do the same when we take any exceptional provisions. This quarter, for instance, we have restated our numbers and in particular our ARPU given the abolition of the IUC regime. To make the ARPU definition very stringent we have eliminated the Inter Connect Revenue and also the inter- license settlements between circles that were related to historic Inter connect regime.What it therefore means is that the ARPU if now a true measure of customer revenues of the Mobile business only. Equally we have given you a like for like comparison with previous periods allowing you to assess our intrinsic performance.A second example is our customer definition. We have a very stringent definition of customers that we use within the company. One of the definitions is Active Customers. Also known as VLR customers. This refers to any customer who is
simply latched on to the network regardless of whether she gives any revenue. The Active customers for us in March 2021 stood at 344.4 million. The second definition is Revenue Earning customers. These are customers who actually delivered some revenue to us in a rolling 30-day period – this number was 321.4 million. The Active number of 344 million will always be slightly higher than the Revenue earning customer number of 321 million for obvious reasons. This is due to what I mentioned already – the active number also includes those customers who may be latched on to the network but have not recharged so they don’t give revenue. Such customers include those who are latched on to our network but have not yet recharged at the end of their validity period. They could also include international in roaming customers who may be latched on but don’t necessarily give us revenue in the preceding 30 days. These definitions, we believe, are stringent, they are directly linked to revenue and they allow you to make a transparent assessment of our performance.Third, if you look at our accounting for depreciation or spectrum amortisation, we do it on the basis of globally accepted practices that every top-notch telecom company follows. We would also love to hear your inputs on our transparency standards so that we can continue to raise the bar always.
Finally, a word on our board. We have an exceptionally qualified board with a diverse skill set that includes expertise across public policy, finance, risk, Private Equity and Technology and Telecom. There are three women directors onour board. And there is a clear separation of responsibilities between a promoter Chairman and a professional and empowered Managing Director backed by a highly professional and diverse management team.