Gopal Vittal

Dear Shareholders,

The financial year 2023-24 was yet another eventful one for the industry. India saw one of the world’s fastest and largest deployments of 5G technology. Airtel remained at the forefront of this deployment. We have now covered all urban areas as well as many rural areas in the country. We made the bold choice of going with Non-standalone technology for 5G (vs. Standalone). And this has paid off well. We delivered the best customer experience on 5G as per external benchmarks, being awarded by Opensignal in 5 of the 6 categories on 5G experience. More importantly, this was achieved at the least cost of ownership, given the NSA strategy we undertook. We avoided paying for expensive sub-GHz spectrum and had to install fewer radios as well.

As we go into the next year, our strategy remains simple and consistent – focus on winning quality customers by delivering a brilliant customer experience to them.Underpinning this are key enablers. First, embed digital at the core of our operations. Second, scale our capabilities to offer differentiated digital services to our customers. Last, do all this with extreme fiscal prudence while waging a war on waste.

This strategy continues to deliver for us, and our performance over the past year has only reinforced our belief in this strategy. I have captured some highlights below.

Quality Customers

We saw sustained growth across our portfolio and hit a lifetime high in revenue market share across all businesses. On Mobility, our bet on expanding our footprint in rural areas has paid off well – we gained market share across all circles and added 28.6 million new smartphone customers during the year. We continue to hold a premium position in the industry and increased our ARPU to an industry-high of ₹209, an increase of ₹16.

On Broadband, we continued the momentum and added 1.6 million customers. We saw some green shoots emerging in the DTH business. After two years of decline, we grew our customer base by 201k, the only operator in the industry to grow customer base during the year.

Airtel Business posted double-digit growth despite headwinds in the global business segment as OTT companies curtailed their spends. The domestic India business continued to deliver solid growth.

Brilliant Customer Experience

Delivering exceptional experience continues to be the bedrock of our strategy. The heart of our business is the Network, since this is the core product that customers use us for.

Here, we have undertaken a massive drive to bring down mobile churn. The whole country is divided into a million grids of 1 kilometre by 1 kilometre, each of them having granular metrics associated with customer experience that is provided to our frontline sales team and our frontline engineers. With this way of working, we are reviewing and solving for churn at an individual site level through a mix of structural corrections as well as leveraging our digital network tools to proactively detect and solve issues.

Similarly, in Broadband, we are undertaking structural changes in our network architecture and design principles while focusing on improving the quality of our workmanship. We have also enhanced our network coverage and capacity by deploying 43,102 sites, strengthening our transport backbone by laying 55,982 route kilometres of fiber, and extending fiber home passes to 6.9 million more households.

In addition, our belief is that experience starts with our people. We think of Airtel as having only two types of people – those who serve customers and those who serve those who serve customers. With this in mind, we had each of our 20,000 people go out into the market and spend a whole day with our frontline sales and service teams in March 2024. This exercise gave us strong ideas that are being put into action. Going forward, we intend to make this an ongoing ritual.

Accelerate Digital

Embedding digital at the core of our operations remains central to our strategy. As I have highlighted before, we see Airtel in three layers. First, Digital infrastructure (network and data). Second, the digital experience, where we have moved from a product-based to a platform-based architecture and developed four key platforms of Buy-Bill-Pay-Serve to power the entire customer lifecycle in an omni-channel manner. Third, Digital services, which include Airtel IQ, IoT, Cloud, Security, SD-WAN and Airtel Finance, all of which continue to scale well.

All these digital layers are enabled by our secret sauce, Data. While every telco typically has a data infrastructure, we have taken it further and built a converged data engine, which sits on top of this infrastructure and powers it.

This Converged Data Engine (CDE) has an existing Data model based on deep telco understanding that can be used simply by any telco as a starting point to make modifications to suit their business context. The CDE enables the ingestion of all data signals as aggregates across all the databases of a telco. The CDE also comes with an in-built intelligence to throw up the next best action across sales and service for a customer as well as an inbuilt CLM that can be integrated across all channels. The strength of the CDE is that it comes pre-packaged as a full stack solution and works seamlessly across all parts of a telco. We have built the CDE as a modular platform and are now extending this to our African operations.

War on Waste

The pressures on cost continue to prevail. To counter this, we continued to review each and every cost element. For example, one significant area where we realised savings was in network site cost. Here we looked at each site and undertook a cost optimisation exercise, be it the usage of alternate power sources like solar, asset optimisation on site or commercial optimisation. This helped us strip out waste of `2,500 crores. As a matter of fact, our operating costs per site declined for the second year in a row, despite adding more equipment on the site. Frugality is central to how we operate, and War on Waste will continue to be an ongoing effort for the Company.

ESG

We continue to remain deeply conscious of our responsibility towards environmental sustainability as well as our obligations towards society and our stakeholders at large.

Both the ESG Committee of the Board and our ESG Management Committee have been diligently spearheading our ESG initiatives. Reducing carbon footprint is a major agenda for us which is now embedded across the business. We accelerated the solarisation drive for our network sites – 20,000+ sites are now solarised. Nxtra now utilises renewable energy for 41% (FY’24 exit) of data center energy needs and is undertaking other sustainability initiatives, such as building zero-discharge data centers and the deployment of fuel cell technology. We are prioritising eco-friendly procurement – SIM cards sourced from recycled plastic materials and DTH boxes made from compostable packaging material. We continue to double down on our agenda to drive diversity in the workforce. The share of women in our workforce moved up by over 40% in just one year and our stores are now gender balanced. Our efforts are being recognised externally as well. We won the ‘Golden Peacock Award for Sustainability, 2023’, and were also awarded the most sustainable emerging market telco by the Future Investment Initiatives Institute.

“We continue to remain deeply conscious of our responsibility towards environmental sustainability as wellas our obligations towards society and our stakeholders at large.”

In closing, I want to express my heartfelt gratitude to our customers, our people, our partners and our shareholders for their unwavering support and confidence in Airtel. We seek your continued support in our journey.

Gopal Vittal

Vice Chairman & Managing Director