Airtel to target Idea and Vodafone subscribers who may opt out due to merger

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Bharti Airtel is planning to target Idea and Vodafone subscribers who may opt out as the merging of operations between the two telcos may lead to  disrupted network.

Airtel may pump in Rs 24,000 crore as capex in FY19 that may be used for aggressive tariff pricing offers, incentivise distributors and retailers, acrry out high decibel marketing campaigns and infuse higher network capex, according to a report in The Economic Times.   

Stating that the company would not compromise on the revenue market share (RMS) front, a person aware of the matter told the paper that Airtel would continue to send out “very competitive offers to fight Jio in the battle for revenue share amid ongoing sector consolidation”.

Also read — Government awaits Idea-Vodafone tower sale closure for green signal to mega merger

Airtel’s RMS is just over 31 per cent compared to Idea and Vodafone’s 37.5 per cent and  for Vodafone and Idea combines, and Reliance Jio’ 14.5 per cent, according to the latest data by the regulator. Analysts estimate that around 400-450 bps RMS of the Vodafone-Idea combined entity could be vulnerable during the integration of the two telcos, which is expected to close by May.

A majority of the Rs 24,000 crore investment will be used to boost 4g networks, drive digitisation and ramp up its content play to ring-fence and grow its share of high-paying data customers in a fiercely competitive telecom market, one of the people aware of the matter told the paper.

The company’s MD Gopal Vittal and chief operating officer Ajai Puri have been travelling extensively to meet Airtel circle heads and field teams across states asking them to prepare competitive tariff plans for luring Idea and Vodafone customers and focus on achieving RMS.

Also read — Vodafone-Idea merger: Combined might of 395 mn users and around Rs 80K cr revenue

Airtel’s distributors believe that the company may step up commissions encouraging them to go the extra mile to poach Vodafone and Idea customers in the coming months. “We are hopeful the company will increase commissions to make the chase for Vodafone and Idea’s customers more lucrative,” a leading metro-circle Airtel distributor told the paper.

These incentives may include “lump sum distributor payouts of Rs 10,000-12,000 for achieving higher targets relating to new customer activations, high value first recharges (HVFRC) and even Aadhaar-linked verifications”.

Airtel declined to comment on this issue stating that it is “currently observing a silent period”, ahead of fourth quarter results.

(Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media Investments Ltd and publishes Moneycontrol.com)

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