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Jio’s entry forces Airtel to focus on rural areas

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airtel-vs-jioFacing tough competition from Reliance-promoted Jio Infocomm Ltd, telecom market leader Airtel is planning to focus on rural areas to gain more customers.

Revealing the company’s plan in a recent interview with livemint.com, Airtel CEO Gopal Vittal said, “We still feel there is an opportunity in the rural areas and we are going deeper there to drive penetration. We believe managing price volume trade-off to maximise Arpu (average revenue per user) is very important.”

The Airtel CEO believes that in a country like India a lrge number of customers “don’t know what to do with the internet; even if they need it, they don’t know how to use it”.

“They have a perception that it’s expensive and there is a perception of value that you need to create. So, it’s a combination of all of these things. Amongst women, it’s much lower than men, penetration rate is substantially low even in urban areas, let alone in rural areas,” he said.

Vittal also believes that Jio’s strategy will work in the long run. “I think Jio’s growth is sustainable. Ultimately, it’s got linked to revenue. To that extent, they have chosen to play in a certain way, which is good and bold. Hopefully, it works for them.”

The telecom giant, which saw its mobile data revenues grow by 23.6 per cent to Rs 3,576 crore in Q2 September 2016 over Q2 September 2015, is hopeful that with their spectrum assets, brand and network expansion, the company will grow substantially in the coming year.

“Consumption will continue to grow. As pricing comes down, people use a lot. I think in the long term, penetration will grow, there is no question about it,” Vittal said.

Airtel is also planning to offer bucket plan to their consumers — generous chunks of data bundled with loads of free voice minutes, content and services — at a fixed price.

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