B&E: You’re celebrating 100 million subscribers. What’s the status quo?
SM: We’re currently in the 15th year of operation and although Airtel has managed to be profitable, we’re yet to be cash flow positive. We recently announced the maiden dividend of the company after 15 years. Our stakeholders were actually looking at waiting for another year for us to turn cash flow positive. However, due to the de-merger of our private company, we had the headroom this year and hence were able to announce a dividend. One has to remember that Airtel has invested Rs.700 billion in setting up hard infrastructure. Infrastructure alone takes Rs.200 billion per year. It should always be remembered that this is a tough industry and one needs to keep on investing. This way, profitability is always measured along with investments.
B&E: What then would be the future growth drivers for Airtel?
SM: Well, we’re hoping that 3G would be available soon, which will lead to better data services. Music-based services are already quite popular and we hope that their popularity will continue to increase in future.
B&E: Are you in the favour of auctioning of the spectrum, or should it be allocated on the basis of subscribers?
SM: Spectrum is an issue that concerns all mobile operators in the country. We’re absolutely aligned to the government process even if it is the auctioning of licenses. All we want is a stable regime with a single process. The practice of allocating licenses on the basis of number of subscribers is not followed anywhere else in the world. We already have the lowest spectrum than anyone else in the world and packing more and more customers is becoming increasingly difficult. We have two of the largest telecom companies of the world in India and they too would endorse this point that as we go further, it would be essential to have more spectrum. The government is currently talking of auctioning the licenses.
SM: We’re currently in the 15th year of operation and although Airtel has managed to be profitable, we’re yet to be cash flow positive. We recently announced the maiden dividend of the company after 15 years. Our stakeholders were actually looking at waiting for another year for us to turn cash flow positive. However, due to the de-merger of our private company, we had the headroom this year and hence were able to announce a dividend. One has to remember that Airtel has invested Rs.700 billion in setting up hard infrastructure. Infrastructure alone takes Rs.200 billion per year. It should always be remembered that this is a tough industry and one needs to keep on investing. This way, profitability is always measured along with investments.
B&E: What then would be the future growth drivers for Airtel?
SM: Well, we’re hoping that 3G would be available soon, which will lead to better data services. Music-based services are already quite popular and we hope that their popularity will continue to increase in future.
B&E: Are you in the favour of auctioning of the spectrum, or should it be allocated on the basis of subscribers?
SM: Spectrum is an issue that concerns all mobile operators in the country. We’re absolutely aligned to the government process even if it is the auctioning of licenses. All we want is a stable regime with a single process. The practice of allocating licenses on the basis of number of subscribers is not followed anywhere else in the world. We already have the lowest spectrum than anyone else in the world and packing more and more customers is becoming increasingly difficult. We have two of the largest telecom companies of the world in India and they too would endorse this point that as we go further, it would be essential to have more spectrum. The government is currently talking of auctioning the licenses.
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