'If you are focused just on India, content monetisation through small screen is not easy'

Bharti Airtel MD and CEO India & South Asia Gopal Vittal has asserted that the telecom company is in the business of aggregating and monetising content rather than acquiring or commissioning content. He also said that monetisation from smaller screen, particularly if the focus is just the Indian market, is a big challenge.

Airtel's rival Reliance Jio has ventured into sports through its sister concern Viacom18, which is majority owned by Reliance Industries-owned TV18. Viacom18 has acquired NBA, LaLiga, and FIFA World Cup rights for the Indian market and the Jio-Viacom18 duo is believed to be a strong contender for the upcoming Indian Premier League (IPL), International Cricket Council (ICC), and Board of Control for Cricket in India (BCCI) media rights which are coming up for renewal in 2022.

During the company's Q3 earnings conference call, Vittal was asked if the company will follow in the footsteps of its bigger rival and look at the upcoming sports rights. Without commenting on the sports rights acquisition, Vittal said that the telco has a different content strategy.

"I would say it is premature to talk about that, but from our perspective if you look at our content strategy and I recall having this conversation a few years ago also when we were confused about what we wanted to do with content. I personally spent a lot of time, almost four weeks, meeting many content players across producers of content across the industry, in particular in Mumbai, and I think we really had to really take a deep hard look at ourselves and say what did what do you really want to do and I think you come to the conclusion that we are not in the business of actually producing content," he elaborated.

"We are in the business of aggregating content and monetising content through the subscription of our digital layer with the scale that we are able to build and that is across screens by the way. So that is really what we will do. The good news in India is that you do have must provide-must carry particularly on the large screen, while on the smaller screen anyone who buys it will ultimately want to monetise it and like we have done with Hotstar we have done a deal with them where we are you know their content is available to our customers and we bundle it with our services," he added.

He further noted that producing content only makes sense if the monetisation is done globally. "So I think we did not see the value, in putting in several thousand crores into producing content in a model that the monetization is always going to be a challenge particularly if the market is only India. If you are doing it globally it is a different matter but if you are focused on India then content monetisation through the small screen is not easy and you can see that struggle that all OTT companies in India particularly the long tail are actually going through."

Speaking about the DTH business, Vittal said that Airtel Digital TV (Bharti Telemedia) has been seeing subscriber migration to DD Free Dish due to the availability of channels like Star Utsav, Zee Anmol, Sony Pal, and Colors Rishtey. Airtel Digital TV has 18 million subscribers and an ARPU of Rs 148.

"In DTH, we now have a presence in 18 million homes with an ARPU of INR 148. Private DTH players are seeing users particularly in the Hindi belt move to Free Dish—some of the Hindi General Entertainment channels with very good content are now being offered for free and have impacted our performance," he noted.

He also said that Airtel is positive about the DTH business from a medium term perspective as the opportunity to convert from cable is massive. "There is also a massive opportunity to leverage the advent of OTT content and deliver a unified and connected experience through Airtel X Stream. Our go-to-market efforts by bringing in all Airtel services through the unique and differentiated Airtel Black will allow us to create value for customers and drive growth."

Another key focus area for the company is the wired broadband business where it has partnered with local cable operators (LCOs) to grow its penetration. In Q3, Airtel added close to half a million net additions that is the highest ever in a single quarter. Airtel's overall broadband customer base is now at 3.8 million.

"The focus on high quality urban homes, our Local Cable Operator partnership model and Airtel Black continue to drive our strategy around home broadband. We expanded our infrastructure in the quarter and added over 1.1 million home passes. Our innovative digital partnership model with the local cable operator has been a game changer for us. Our presence has now expanded to 436 towns. In order to accelerate growth and improve the experience at our stores we have now started to insource all our retail stores. You may recall that 1400 of the 2000 odd stores were earlier on a franchise model. We hope to conclude this process by the end of this fiscal year," he added.

Vittal said that the Fiber to the Home (FTTH) is a very large opportunity and the company will continue to step up investments to take its network to 2000 towns across India with 35 million home passes in the next 3 years.