Bharti Airtel plans Rs60,000-cr capex for network upgradation
30 Nov 2015
India's biggest telecommunications carrier, Bharti Airtel Ltd, plans to invest Rs60,000 crore on network upgradation over three years, as competition heats up in the world's second-biggest mobile phone market.
The investment plan comes as Reliance Industries Ltd, headed by India's richest man Mukesh Ambani, prepares for the launch of the nation's biggest 4G broadband network to take on Bharti Airtel, headed by billionaire Sunil Mittal.
Mobile phone carriers in India had spent billions of dollars on the acquisition of telecom airwaves to meet surging demand for quality and fast data connection as more Indians accessed the internet through their smartphones.
According to Airtel, the bulk of its investment would be used on infrastructure for improvement of voice and data services in a country known for its poor mobile connectivity.
According to Gopal Vittal, Bharti Airtel's chief executive for India and South Asia, the planned investment, to be raised largely through cash accruals, included the capital expenditure target of about $2.2 billion (for the current fiscal year to March 2016).
"There still are problems with the network...We are still not where we need to be," Vittal told reporters, in a reference to India's increasingly congested airwaves that left calls disconnected in the middle of conversations.
"The programme, called Project Leap, will see a network transformation. Large parts of this investment will improve voice services," Vittal said.
He added, the money for investment would be generated from internal accruals and free cash flows.
This investment of Rs60,000 crore would be in addition to the Rs160,000 crore the company had already invested in its active and passive network, spectrum, optic fibre, submarine cables and systems till date.
In response to a query as to whether the company would invest a part of this fund for spectrum acquisition, Vittal said there was no immediate need as the company had bought sufficient spectrum in the last couple of years. There were only some telecom circles with gap in airwaves and hence the company might buy airwaves in those circles in future.