Bharti Airtel Lanka CEO and Country Head, talks to Echelon about the company’s growth strategy in a small, competitive market, mobile number portability, and 4G . He tells us how Airtel is challenging the status quo by offering customers lower tariffs, more data for the buck, and no more unused data going to waste.

Can you take us through your strategy to become one of the top players in the country?

Sri Lanka liberalising the telco market 25 years ago had a transformative impact on the industry, but it was in the last decade that growth started to accelerate. The first challenge for the industry was making mobile phones accessible to everyone. We did a great job doing that in the first 10 to 15 years, but now we have a bigger task: bringing mobile internet to everybody. Sri Lanka’s mobile penetration is the highest in South Asia, with nearly 30 million devices for a 21 million population. However, 4G mobile penetration is at 50%, although 95% of the country has broadband coverage. This means the growth potential in 4G is tremendous.

Airtel has been around for 25 years and is the world’s third-largest mobile service provider, operating in 18 countries. Airtel began its journey in Sri Lanka about 13 years ago. We were the first telco to cross the one million subscribers mark in this country. Currently, we have an 11% share of the Sri Lanka market and invested in around 2,200 telecom towers, adding over 50 new sites a month until we have considerable coverage over the entire island. We are also rolling out a 4G broadband network that is 5G ready, so we are committed to the future of Sri Lanka.

I consider providing a service to the customer as a two-step process, one is creating a network, and the second is making the service affordable to the customer.

On the network front, we expanded our network by adding over 2,000 4G towers last year, increasing our capacity by four times.

Currently, we are focusing on how can we take mobile broadband services to the masses and make them accessible and affordable to all.

We recently redesigned our offerings to make broadband more affordable. For example, our market research shows that our packages offer five times more value for every rupee spent. To illustrate, we have a Rs599 package that gives you 30GB of data a month with unlimited social media access, unlimited on-network calls, and 300 minutes to other networks. If you go to the market and buy the same bouquet from any other operator, it will cost you about Rs3000 or more.

Another great benefit we give our postpaid customers is the ability to carry forward unused data.

Typically, data bundles of other operators lead to unused data going to waste. If your package gives you 5GB of data a month, but you use only 3GB, the remaining 2GB expires. Airtel Lanka, on the other hand, allows data rollover up to a maximum of 200GB! So we are creating value for consumers.

While we rollout out 4G, we are also making life simpler for consumers with simple value for money tariff plans and products. Everything we do is about providing the consumers with a better experience, and that is going to be our growth strategy and how we will differentiate ourselves.

We have requested the TRC to abolish interconnection charges, and if that happens, it will lower call charges further

Is it right to say that Sri Lan ka still has one of the lowest tariff structures in the world? What will your strategy then do to your margins?

According to the latest index, Sri Lanka is ranked at 21 in mobile broadband tariffs among the 181 countries surveyed (source: economynext 2019). So yes, we are in a happy state, but I still believe we can be among the top five or three and why not? If our neighbour India is the number one for the most affordable service, why should we be ranked 21? I still believe there is scope for the industry to continuously lower tariffs further so that the last mile-consumer can also use telecommunication services to connect to the world. That is important because telecommunication services, especially internet broadband services, are a big democratizer that narrows inequality. Also, as teledensity in terms of broadband improves, so does GDP. Every 10% increase in teledensity leads to a nearly 2-3% increase in GDP (source: World Bank).

Are you banking on the mobile number portability?

We welcome the move as it offers consumers freedom of choice. Our strategy is not only dependent on mobile number portability. Why? Because in the world of broadband, there is no conformity to a mobile number. If you are not making an OTT call, you can use any number on any network, so the number portability on any platform is already available.

At Airtel, we believe more and more revenue and usage will move towards data, and voice will become virtually free. We have seen this happen in other markets. People are increasingly moving away from voice calls and living on data. That is where the growth will come from, we believe.

What is the revenue mix right now from data and voice?

We have stopped segregating data and voice. The new way of looking at telecommunication is asking the customer to subscribe to a monthly fee for all the services in data and voice they may need. However, data is taking on a larger share of the revenue mix as voice usage declines. Last year, our revenue mix consisted of 62% data and 38% voice.

Your market share is about 11% right now. Where do you want to see that move to in the next couple of years?

Our goal is much larger than gaining just on market share. Our goal is to make Sri Lanka more prosperous by bridging the digital divide. The paramount goal that we are driving is how can we create a connected and digital economy. We will do that by rolling out 4G and state-of-the-art world-class services at affordable prices to all Sri Lankan citizens. We aspire to build Airtel Lanka into one of the most admired and respected companies in the country. If we can deliver that, market share will come to us, and in line with our global strategy, we are eyeing market leadership status in Sri Lanka and nothing less.

We have a range of services across multiple countries, and we are exploring ways to introduce some of them to Sri Lanka. For example, we operate data centres, security and platform services in different parts of the world. We are currently evaluating these to find what will best work in Sri Lanka based on consumer needs. Once we gather some critical mass of our customers and the socio-economic conditions become a little better post-pandemic, we will be ready to launch the next level of those services in the country.

We believe we need to consolidate and create a substantial customer base before we can provide multiple services such as entertainment, enterprise solutions, and other services. Our priority is to reach maximum customers with mobile broadband services – we are looking at doubling our market share in Sri Lanka over the next two to three years. Sri Lanka is still a growing market, and I believe we have a tremendous opportunity to grow our market share.

What is your take on the competitiveness of the telco industry? At one time, the competition was cut-throat intense?

I think the telco industry in Sri Lanka is mature and responsible. There are five players and between us, there is cohesiveness, cooperation and commitment. We share our towers and fibre networks as we work closely to improve telecommunication infrastructure and services in the country.

We also collaborate on educating customers and on regulatory matters. Sri Lanka is fortunate to have a progressive regulator in the TRC. I would rate the TRC among the best for its responsiveness, vision for the country, and industry support.

Any regulatory changes you would like to see that could fast track the digital journey?

The regulator is very supportive of the industry, and there are several initiatives we are working on together.

One regulatory initiative we are encouraged by is mobile number portability. When this comes into the picture, it will place more power on consumers because they can then decide which operator they want to be with and that provides a better-levelled playing field to a small player like us. Although voice continues to decline, there is still some affinity around mobile numbers in this market. So mobile number portability will break that limiting feature and give consumers better choices and value for money.

Our goal is to provide the most affordable voice service in the region to Sri Lankan consumers because it is a human need, and this is something we have done in other markets in the region for both on-network and off-network calls. At present, we cannot offer lower tariffs voice calls off-network because of the interconnection charges between operators. However, for Airtel-to-Airtel calls, voice is unlimited. We have requested the TRC to abolish interconnection charges, and if that happens, it will lower call charges further.

Our request to the regulator is to shorten the time taken to set up a communication tower from six months to 45 days with a single-window approvals process. That will help us roll out our expansion plans faster.