Afternoon, ladies and gentlemen. I am Rajita, the moderator for this webinar. Welcome to the Bharti Airtel Limited second quarter ended September 30, 2021 earnings webinar. Present with us today is the senior leadership team of Bharti Airtel Limited. I must remind you that the overview and discussions today may include certain forward-looking statements that must be viewed in conjunction with the risks that we face. Post the management opening remarks, we will open up for an interactive Q&A session. Interested participants may click on Raise Hand option on Zoom application to join the Q&A queue. The participant may click this option during the management opening remarks itself to ensure they find a place in the queue. Upon announcement of name, participant to kindly click on Unmute Myself in the pop-up on screen and start asking the question post-introduction. With this, I would like to hand over to Mr. Gopal Vittal for the opening remarks. Thank you very much. Good afternoon, ladies and gentlemen. Thank you for joining this webinar to discuss Bharti Airtel's results for the quarter that ended 30 September 2021. Present with me on this webinar are Harjeet Kohli, Kamal Dua, and Rajiv Sharma. Let me start with a quick review of recent events that have impacted the industry. As you're aware, the government announced seminal reforms that will help preserve cash flows and enable the industry to drive investments. There have also been substantial steps taken to simplify the way we do business by cutting back on several needless approvals and easing the customer onboarding processes. We welcome these steps and remain committed to meeting the vision of a powerful digital and connected India. The second important event this quarter has been our rights issue. We've had a very encouraging response. Our issue saw a subscription of approximately 1.44 times, overbid by both public and promoters. We thank all our investors for believing in the Airtel story. Airtel is well-poised to benefit from the huge growth we're seeing in digital adoption across 4G, 5G, home broadband, data centers, digital services, payments, and much more. On to our performance. Our overall portfolio of India Mobile, Enterprise, and Homes in India, as well as Africa, has delivered strongly this year, or this quarter. Our consolidated revenues for the quarter grew by 5.5% sequentially to reach a little over INR 28,300 crore. Our OIBDA margins improved over the last quarter from 49.1%-49.5%. Let me now briefly touch on each of our businesses. In our broadband business, we've seen strong customer growth of close to 500,000, a level of net additions that is the highest ever in a single quarter. Our overall 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 truly 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've now started to in-source all our retail stores. You may recall that 1,400 of the 2,000-odd stores that we had were earlier on a franchise model. We hope to conclude this insourcing process by the end of this fiscal year. We believe fiber to the home is a very large opportunity and will continue to step up investments to take our network to 2,000 towns across India with 35 million home passes in the next three years. 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 good content are now being offered for free, and this has impacted our performance somewhat. Yet we are positive about the DTH business from a medium-term perspective. The opportunity to convert from cable is massive. There's also a big opportunity to leverage the advent of OTT content and deliver a unified and connected experience through Airtel Xstream. 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. Let me turn to the enterprise business. For the quarter, Airtel Business clocked revenues of just under INR 4,000 crore, a sequential growth of 5.4% on revenue and 8.4% on OIBDA. Our margins improved to 39.9% this quarter. I'm personally excited about our enterprise product portfolio, which allows us to capture future growth opportunities. I will talk more about this later today. Last time I spoke to you about our focus on going both wide and deep. We aim to tap into the 80% of customers who account for only 20% of our revenues, and go deep in those accounts we have solid presence in, so that we can sell many more products and raise switching costs. Our focus on new product acceleration continues. We are also excited about the data center business and intend to step up investments to INR 5,000 crores in the next few years. Our unique ability to differentiate by providing resilient connectivity coupled with our strong relationships with customers across both domestic players as well as hyperscalers gives us a real solid competitive advantage. Let me now finally comment on the mobile business. Our performance here in this quarter has been strong. Despite a substantial tariff increase at the lower end of the market, we were able to grow our mobile net adds at 2.2 million and 4G customers at 8.1 million. This underscores the strength of our strategy to focus on quality customers. Given that bulk of the tariff increase has flowed through into revenue, our ARPU improved to INR 153, an increase of INR seven in a single quarter. Our revenue market share at the end of quarter one was well over 35.6%, a lifetime high. We continue to believe that mobile industry ARPUs are not sustainable and should improve to 200 in the near term and 300 ultimately in the longer term. This quarter, we launched our second version of the Mera Pehla Smartphone cashback program. This program is applicable across 175 devices with a price of less than INR 12,000. While this will certainly create buzz and preference for the Airtel brand in the marketplace, our experience suggests that this will not have a meaningful dilutive impact on ARPU or profitability, something that we have thought about carefully as we designed the contours of the program. I would now like to step back and share my excitement at the four critical moats that Airtel has. You will find some detail on this in the form of a few slides that has been uploaded on our website today. The first moat is around payments and our Airtel Payments Bank. Today, Airtel Payments Bank has a customer base of 115 million with a monthly transacting user base of over 31 million users, an annualized GMV of over $17 billion and a merchant base of over 8 million. Revenue is close to INR 1,000 crores on an annual basis, and we're now EBITDA and PAT positive this quarter. One reason we believe this business is a strong moat for Airtel is that when a customer's bank account number is also her mobile number, there is much lower churn. Our monetization model for the payments bank can be broken down into three broad categories. First, transaction income, driven by the ability to participate across the value chain. Second, interest income. Finally, fee income, which originates from our ability to cross-sell. Let me elaborate on these. Unlike other players in the market, we think of the India opportunity through a multi-segment way across three different parts, tier three and beyond markets, digital users, particularly in urban areas, and finally the B2B segment. Let's start with tier three and beyond markets. Here, our strength is the ability to leverage our distribution, and with 0.5 million business correspondents, we are well ahead of anyone else in the market. To put this in context, our total Payments Bank distribution is two times that of the total ATMs and bank branches in the country. I believe that we have not just a first-mover advantage, but an only mover advantage that allows us to offer our customers a full stack digital account here. It is this advantage that has enabled us to get to leadership in the remittance market. Remember that this market is growing rapidly. In fact, it's estimated to grow at 70% over the next few years. A second big opportunity here is Aadhaar-enabled payment systems, which allow customers to use Aadhaar authentication for various banking activities. This segment is expected to grow upwards of 45% CAGR over the next four years. We're also driving financial inclusion by being a key player in the distribution of various government-sponsored schemes. The second opportunity is the digital user. Here we are well-placed, as we can leverage the 180 million-plus customers we have across our digital assets. We offer a plethora of services such as lucrative interest rates, gift cards, digital gold, FASTag, telecom recharges, payments, and debit cards. Our large merchant base of more than 8 million allows us to drive both engagement and monetization. This is one area that is now seeing solid traction, and you will hear more about this in the coming quarters. The third segment is B2B. With the growth of e-commerce and the need for cash management across a very distributed geographical footprint, we have a unique advantage through our large retail footprint. $100 billion in cash is digitized monthly, and cash management charges are estimated between 0.5%-1% of the collection amount. As a result of this multi-segment view of the market, a critical metric we focus on is what we call the take rate. This rate is the conversion from GMV into revenue. On the take rate, we are at 0.74%, which is among the highest in the industry. This shows our relentless prioritization of monetization or what we believe can otherwise become a mindless attempt to grow GMV through discounts and cashbacks. As you can see, we're just getting started, and with the bank breaking even, we believe that the realization of this massive opportunity is now a natural right given our strengths. The second exciting moat I see is around our enterprise business with its robust future-proof portfolio, which I referred to earlier. The reason this business is such a strong moat for Airtel is the tremendous stickiness that we have with our customers for our services. The fact that customers trust us with their data, the enormous respect they have for our governance and privacy are all intangible but priceless sources of competitive advantage. As of date, we have only disclosed the broader revenue numbers for this segment. Today, let me provide a little more color to allow you to understand the robustness of our overall portfolio. Our revenue in the enterprise business has three component parts. The first component of revenue is voice services. This part of our portfolio has been under pressure, and this is the same for all players in the industry. Our profitability is at par with the industry, and our focus here is to continue to grow market share given our relationships with customers while preserving profitability so as to generate cash. The second revenue component is connectivity and connectivity-related solutions. This includes all our services around connectivity, data centers, security, cybersecurity, like Airtel Secure, software-defined wide area networks, IoT, and connectivity-based partnerships, such as bundled routing solutions. Here there is healthy double-digit growth, and our margins are better than any of our competitors. In this segment, we have a 31.7% market share in data and a 44% market share in mobility, and this is as per Frost & Sullivan. We believe that we are very well poised to see further consolidation of customer spends and enterprises as we move towards 5G. The third component of revenue is CPaaS, communication platform as a service. This part of our business has been the fastest-growing part of our portfolio at very strong double digits. In this segment, our profitability is well above the industry average. This part of our business has now become meaningful and accounts for almost 15% of the total enterprise business. Our CPaaS business plays to our strengths of combining our network and digital strengths. With the launch of Airtel IQ, we are very well poised to win this rapidly growing market. We plan to sharpen our offers and focus on bespoke solutions to accelerate share. We also now want to expand this across the globe through our wide coverage of our sales teams located in all parts of the world. The third moat is our quality customers and high-value homes. We say this because our portfolio plays squarely to the premiumization that will continue to unfold in India. Last quarter, I spoke to you about our view of the Indian consumer market opportunity. Let me quickly refresh your memory. We see the market in three parts. The bottom segment has about 400 million users comprising of farmers, rural traders, et cetera, who are largely users of feature phones today. They're looking for basic connectivity and a satisfactory experience that is hassle-free. This is a segment with the lowest level of ARPU. The second segment is almost 500 million migrants, gamers, young students, blue-collar workers and traders. We call them aspirers. We see a 2x shift in ARPU when the feature phone user switches to a smartphone. Simultaneously, we see a lowering of churn. We have built powerful analytics using data science to drive this switch. We've also honed to a fine science the underlying drivers of churn. Within the company, we have what we call the ten commandments of churn, each of which is based on a very granular understanding of customer behavior. There are potentially 50 million-odd high-value homes in India. They comprise of executives, self-employed professionals, businessmen, et cetera. These are customers who want to feel special. They desire a simple, convenient experience, and they're concentrated in the top 25 cities of India. The first point of entry for us is postpaid. Here again, we see a doubling of ARPU when someone switches from prepaid to postpaid. One of the lesser-known secrets of our business here is our family proposition. This allows the customer to add a member of their family and share data with them on the same plan. Today, a majority of our postpaid customers are on the family plan. Churn here is minuscule and switching costs very high. Right at the top of the pyramid, we see ARPU tripling when a customer moves from a simple postpaid plan to being a part of Airtel Black. The primary benefit of Airtel Black for us is that it raises switching costs for customers and provides genuine value to our customer. It is this overall focus on premiumization and quality customers that have allowed us to raise our ARPUs, even in the absence of tariff hikes over the last five quarters. As I said earlier, given the natural structure of our portfolio, we are in a pole position to win. The fourth moat is our capabilities in the digital layer that is riding on our underlying platform to drive meaningful digital services revenue at a negligible CapEx and OpEx. There are four capabilities we have here, and I've talked about these in the past. Let me briefly provide some texture to each of them. First is data. We've made significant investments over the last two years in our data infrastructure platforms, in data science and in data analytics. One such investment has been in an integrated CLM, customer lifecycle management view, which allows us a 360 view of our customers. This is what helps in the premiumize, premiumization approach I talked of earlier. It also helps us to drive other digital revenue streams. Second, payments. We're now doubling down on accelerating payments through leveraging the unique strengths of the telco. Authentication, distribution, security, and digital scale. We recently launched Airtel SafePay and Bank Wala SIM. You will see more innovation from us addressing the urban digital users in the coming months. Third, distribution. Today, we have state-of-the-art capabilities in the form of real-time messaging, vernacular campaigns, and an omni-channel view, all with real-time metrics across our entire portfolio of customers. Our new integrated CLM has replaced the earlier business-led view with a much more cohesive and simple customer view based on clearly identified cohorts. This is what helps drive the next best offer through strong digital intelligence across both our core business as also digital services. Finally, network. We've made substantial investments in the digital layer through cutting-edge tools that leverages AI and ML. Let me give you an example of one such tool. This tool provides us with network and customer insights that helps us identify the right site for deployment. In addition, it gives us precious insights on where we need to get more customers at an individual site with a clear set of hypothesis on why we have been enabled. It is this very granular understanding that allowed us to get almost 40% of incremental 4G net adds in the last 12 months from specific locations that we target. A second homegrown tool leverages AI and ML to troubleshoot and fix network experience. It is these four capabilities of data, payments, distribution, and network that is now helping us generate digital services revenues that are increasingly meaningful. We have two sources of revenue in the consumer side, subscriptions or commissions and AdTech. On the B2B side, our source of revenue is really SaaS-led. Subscription and commissions work off our underlying assets, Wynk Music, Airtel Thanks, and Airtel Xstream. In AdTech, we now have integrated all our assets across our digital assets, DTH, and media ad vehicles such as ringtones. We have over 140 brands already leveraging our platform and growing. Let me turn to B2B. Our biggest bet here is Airtel IQ, which is expected to be a platform for all kinds of cloud communication services, voice, video, streaming, and eventually even workforce management. Every one of these services is used by Airtel, and we now have over 175 customers on this platform. These customers range across the biggest internet companies, banks, and many more. As you can see, we're increasingly thinking of our business as an ecosystem. We believe we're in an exciting phase in our digital journey. In these last few years, I have learned that moving a business as large as ours from an offline view of the world to an omnichannel digital world takes anywhere between three-four years. The good news is that we commenced our journey five years ago. I've also learned that you have to be focused on asking the right questions. The three key questions we ask ourselves all the time are, one, what problem are we solving? two, how do we get the right talent to solve this problem? And three, how do we ensure that their paths are clear so that they can get it done? This is easier than it sounds. It needs leadership resolve, it needs a collaborative culture of inclusion, and above all, it needs a flat, agile, and decisive way of working. The good news is all of this plays squarely to our strategy of winning the best quality customer, giving them a brilliant experience, and doing this by building compelling digital capabilities. I wanna end with a few words on ESG, governance, and the balance sheet. The company remains aligned with the Paris Agreement, proactively implementing clean, fuel-based power solutions for our towers, data centers, switching centers, and other facilities. We've remained committed to society, our customers, and employees right through the harrowing time of the pandemic. We've always demonstrated the highest standards of corporate, financial, and operational disclosures. Our classification of revenue and costs are in line with our best global peers. More importantly, with the additional color on the payments bank this quarter, we've shown our commitment to maintaining the highest standards of disclosure. At the right moment, we will give you more color on our digital services in terms of disclosure. A final word on the balance sheet. The balance sheet continues to be robust with healthy and improving cash flows. Our leverage ratio is under three, and we remain committed to being financially prudent and yet growth-focused. An important highlight that I do want to underscore is that in the past quarter, we've reduced our bank debt to zero. We will continue, of course, to evaluate all options to maintain a comfortable leverage profile and optimize associated costs. In sum, our performance of the recent quarter has been strong because of the resilience and depth of our portfolio. In every one of our businesses, we're at a lifetime high in terms of revenue market shares, the most critical barometer of our competitiveness. Our strategy and choices are dictated by our view of the market and the way we can tap into that opportunity. These choices are simple and cohesive. It is these choices that has enabled us to build an Airtel of the future, which is well-positioned to win. Thank you. Thank you very much, sir. We will now begin the Q&A interactive session for all the participants. Please note that the Q&A session will be restricted to analyst and investor community. Due to time constraints, we would request if you could limit the number of questions to two per participants to enable more participation. Interested participants may click on Raise Hand option on Zoom application to join the Q&A queue. Upon announcement of name, participant to kindly click on Unmute Myself in the pop-up on screen and start asking the question post-introduction. The first question comes from Mr. Nicolas Baratte. Mr. Baratte, you may please unmute your side, introduce yourself, and ask your question now. Yes, hello. Thanks for taking my question. I have a very broad question about the moratorium, the AGR and spectrum moratorium, in terms of how could that change the shape of the income statement or the balance sheet, in the coming quarters, in terms of either cash spectrum fees or other cash expenses or value of the spectrum capitalized or recognized on the balance sheet? What type of changes in the numbers could we expect to see, at which point, in which quarter because of the moratorium? Thank you. Thank you. Kamal or Harjeet, you wanna take this? Kamal, do you wanna take this? Maybe, Harjeet, you can add. Nicolas Baratte and I, this is Harjeet Kohli. Can you hear me? Yes. Yeah. I think, look, your question is very valid. If you look at the moratorium that the industry enjoyed for the last two years, and that is why this particular quarter, close to about $1.2 billion moved from, you know, accrued interest, which was sitting in other liabilities to debt side because we haven't paid that. Your question will, you know, mean for the four years that we have. As an example, if you have INR 100, which we should have paid every year, each year has a differential amount of interest attached to it. As the year ends, that interest should have been paid, but it has not been paid. It will move to the debt. All of these four installments, you will see, you know, re-depending upon the yearly cycles, a movement of accrued interest which is not paid, which will move to debt. The debt which stands outstanding, continues to stay there and accrues new interest. It's sounding more complicated, but net-net for your purpose, the broad thumb rule is as follows. On a yearly basis, we have about INR 85,000 crore-INR 90,000 crore of government liabilities, let's say about $11 billion. Different interest rates are applying to each tranches of our outstandings. You can take a thumb rule of 8%. 8% of this about $11 billion is the yearly interest kitty. That should ideally be into the P&L, amortized out, but given that it is not paid, it'll move to debt. Okay. Got it. Basically that will only impact capitalized debt on the balance sheet or accumulation of. Okay, at 8% accrual rate. Okay, good. My second question is, you know, before the September quarter, we've had the Indian mobile ARPU sort of fairly flat ex-IUC at INR 145 per month, let's say. Of course, in the September quarter, this very nice increase to INR 153. Is it possible that 153 totally reflects or not totally reflects the various tariff increase that you have announced or effected in the course of the quarter or let's say from June to September where you've actually changed a number of fee structures there? Is it possible that we do not see or we do see the total impact of that in the 153 ARPU in September, or should we expect something else, something more in December? Thank you. Nicolas, I think if you look at the last five odd quarters, net of the interconnect, which you know peeled off, we have grown our ARPU by almost INR 10-INR 11. There has been a secular movement. It's not much because really big bump in ARPU will have to come through tariff increases. We do see through the impact of the premiumization of our portfolio that we have some ARPU increase that we've been seeing over the last five quarters. This quarter, obviously, the increase was largely on account of the tariff increase that we put in at the lower end of the market. I would say a bulk of that has now flowed through into the quarter. Because most of these plans are 28-day plans, and we began it towards the back end of last quarter. To that extent, they've flown through. Thank you very much, Mr. Baratte. The next question comes from Mr. Vivekanand Subbaraman. Mr. Subbaraman, you may please unmute your side, introduce yourself, and ask your question now. Thank you for the opportunity. This is Vivekanand Subbaraman from Ambit Capital. Gopal Vittal, thanks a lot for giving additional color on Airtel Business. My specific question here was with respect to the three cuts that you made on the enterprise business. The second segment, which is connectivity and connectivity related solutions. You said that it is now, or rather you are looking at it now more like a SaaS business. Just wanted to understand your thoughts on how we should look at growth here, the role of 5G, and possible insights on hunting versus farming. Yeah. I think, Vivekanand, I think what I was referring to is actually three parts to the B2B business. One is voice services, which I said is kind of, you know, broadly declining. We have good margins there, and we are using that to actually generate cash. The second part is really what, you know, you referred to, which is connectivity and connectivity-based solutions. This is not SaaS models. I mean, these are basically everything to do with connectivity, different forms of connectivity, thick pipes, thinner pipes, SD-WAN, data centers, bundled routing solutions, Airtel Secure, which is really our cybersecurity, the SOC model that we have. It's an annuity model that we have to actually monitor cybersecurity threats all over the world coming in and attacking the Indian environment, IoT, and so on and so forth. The third revenue stream, which is what I call CPaaS, which is communication platform as a service, is really the parts where we are moving more and more towards the SaaS model. This part of our portfolio is about 15%. It's growing very rapidly, very strong double digits. I think we are in a very good position there because we also have a large pool of global sales force all across the world. For example, we just launched our streaming platform as part of Airtel IQ. By the way, we have several conversations running into several, you know, multiples of tens across the world for the streaming platform. We have Airtel IQ, which was a voice-based platform. Many internet companies, banks and many more are already on it. This is a SaaS-based platform. All of these are SaaS-based services, and this is what we're calling communication platform as a service. We have many more things coming there. I referred very briefly to distributed workforce. We have one of the largest distributed workforce, almost 50,000 people who we need to manage, and many of them are not employed in our roles. These are people who work with our partners and our associates. Yet we need to make sure that they deliver the best experience. For example, if you order a SIM, you go online and order a SIM as a postpaid customer, we will make sure it's delivered at your home. If you order a broadband connection, we'll again make sure that an installer shows up in your home and actually delivers it, and so on. All of that orchestration of the entire work that is done, which is the workforce management, routings, scheduling, analytics, real-time information of calling into that customer, all of that is something that we have home-built for our own use, and we believe this is also part of Airtel IQ that we will finally take to market as well. That's really what I mean by the SaaS side of the third revenue stream on the enterprise business, which is communication platform as a service. Okay. Thanks, Gopal. That was quite clear. Just one small follow-up. You have made certain investments in startups like Vahan, you know, which are very specialized in nature and can help you supplement your SaaS offering. Is there a thought process of utilizing some part of the growth capital into, say, acquisitions that can be bolted onto your platform and you know, you can monetize better than the startup? Yeah, I think that option remains. I think the specific example of Vahan is a very good one, where actually they've joined our accelerator program. Essentially what they do is they try to solve the problem of identifying temporary workers in the gig economy for people like, let's say, Ola or Uber or Zomato or Swiggy or any one of these people. Using our data, they are able to do a much better job because we pretty much know who a migrant is. We've got a whole bunch of models that can tell you who's a migrant. We have about 40 million odd migrants on our network, you know, based on their calling patterns, their usage patterns, their and a whole bunch of other things. That helps them actually solve that problem. To that extent, it also gives us a lot more texture on our segmentation, which goes back into CLM. Most of these companies that are joining the accelerator model are those who we see a strategic importance in to improve what we are doing in our own strategy. At the same time, they see an advantage because it helps them actually get a larger scale, and it helps them actually get to accelerate whatever it is that they're doing. These come typically at very low values because they're seeing strategic significance. But the option of actually investing more, that once we know them well and once we understand them, is always something that we can exercise at our end. Okay, understood. My last question is on the recent Opensignal report that seems to indicate that your network lead versus peers probably has narrowed versus say six months to a year ago. Gopal, what are the ramifications of this on your you know network positioning and any thoughts that lead into the CapEx intensity discussion? Thank you. I think that, you know, at the end of the day, I think this is a treadmill, and you have to constantly keep getting better. In the recent past, there was more spectrum bought by some of the operators. So to that extent, some operators would have got relief in terms of the quality of their experience, especially as they've rolled out large networks. I think the fact is that there is still, you know, this is a continuous improvement exercise. The investments that we are making in capacity solutions, in coverage, you know, the big investment we made on our sub-GHz bands to actually cover through sub-GHz across the country, both in rural as well as improve indoor coverage, has been a big step in improving experience. We're also spending a lot of We're putting a lot of attention on caching at the edge on a number of tools to digitize the way that we operate in order to improve the experience. The perception of what drives experience is something that we are increasingly clear on what drives experience. It's often not just about speeds, because if you're using, let's say, if you're doing a browsing session, you don't need too much speeds, but if you're downloading a big game, then you do need speeds. If you're playing a game online, you need lower latency. There are very different applications that are there, and much of that understanding is what we try and use to improve the perception of experience amongst customers. Okay, thank you very much. Thank you very much, Mr. Subbaraman. The next question comes from Mr. Manish Adukia. Mr. Adukia, you may please unmute your side, introduce yourself, and ask your question now. Thank you. Hi, this is Manish Adukia from Goldman Sachs. A couple of questions from me. The first question on the smartphone cashback offers that you announced last month. Can you talk about just some initial traction of what you're seeing on this? I know you touched upon it in your initial remarks, but just some more color on what the traction there is, and what is the customer segment that this particular product is being targeted at? Or rather, you know, what is the objective that you are trying to achieve with this offer? And maybe some color you can provide on also your competitors launch last week and your thoughts on that. Second question. When the company had announced rights issue in August, the chairman had mentioned that the company believes there's a once in a lifetime opportunity in the industry, and that you expect to win market share across all your key segments, including wireless. Now does that thought process change at all, with the announced relief measures by the government last month? Or are you still anticipating, you know, continuing to gain market share in your wireless business, despite, you know, potentially, cash flows from all the competitors now becoming better than they would have? Yeah, I think on your first question, Manish, it's a bit premature for me to comment because we've just about launched it. You know, I mean, devices are changed once in 18-24 months. Given that it's just literally happened a couple of weeks ago, it's too tiny, too few data points for us to really make a meaningful pattern out of it at this stage. I would just say that, you know, I have been traveling. I've been to around five or six circles. I've been to Rajasthan, I've been to UP, I've been to AP, Bengal, and I've seen that the buzz in the market amongst the trade is quite high. There's a sense of excitement about the scheme. You know, a lot of this is about how this kind of plays out over the course of the next, I would say 60-90 days. Perhaps I'll be able to give you a little more texture at the next earnings call. On the competitive device that was launched, I mean, I'm not gonna comment much, but suffice it to say that smartphones generally are seeing a lot of cost pressures, input cost pressures. Chipset costs have gone up a lot. There's memory shortage, so memory prices have gone up. Screen prices have gone up. And as a consequence, overall smartphone costs have gone up because prices have gone up because of the input cost being high. Therefore, what we've seen in the market in terms of the competitive launch is, again, early days for us to comment. I don't know whether this is going to really upgrade feature phones in a massive way. At this point it's too premature for us to see. The second thing that I would say is that the target audience for our intervention is really to upgrade from feature phones. The devices that this offer is targeted at are those which are less than INR 12,000. These are basically the entry-level smartphones, which typically used to range between INR 7,000-INR 9,000 or INR 6,500-INR 9,000. Now, given the input cost pressures, most of these prices have gone up to around INR 9 thousand-INR 12 thousand. Anything below INR 12 thousand, there are about 175 devices where it's applicable for, and we hope that it will give us some upgradation. Of course, as I was saying, given that the prices generally have gone up, let's see how what it does. On the point on the rights, I don't think anything changes. I think the fact is that the equity raise that we have done is really, you know, has been done in order to actually use this once in a lifetime opportunity to accelerate our investments on networks, on data centers, on home broadband, and of course, also look at softening our leverage somewhat. It's a combination of all of that. Nothing changes. I think the operating cash flows of the business are strong. We will continue to invest for growth, and we will also be sort of prudent in how we look at it. I wouldn't say anything changes. I think the opportunity, like I've talked about in my opener, is large. It's exciting over the next few years, whether it's premiumization, whether it's the feature phone to smartphone upgrade, over 100 million devices just on our network alone. Postpaid, which could be, you know, historically has not seen much traction in the last four years, given the very depressed pricing on prepaid. It's now beginning to see some traction in the last few quarters. If you look at markets like Brazil and so on, or Philippines even, postpaid tends to be 50%-60% of their business, so there's no reason why postpaid on a secular basis should keep at the levels it is, but it should keep growing. Then, of course, there's the convergence right at the top. All of this, I think, adds to the premiumization and the growth opportunity. Right. Thanks so much there, Gopal, for that. Another question that I had was just on your free cash flow profiles. Now we are seeing that ARPU are improving for the business. You've availed moratorium on both the spectrum and AGR, which probably means that over the next three-four years, free cash flow profile of the business should look significantly better than what it has in the past, even considering the continued elevated CapEx levels. Where will this free cash flow largely be deployed? I mean, are you looking to increase the return to shareholders or do you foresee any new use of cash in the core business that you have? Well, look, I think firstly, let's just understand the conditions of the moratorium. As far as the moratorium is concerned, if you choose to take the moratorium, which we have, the interest that is payable on the moratorium is converted to an NPV, and you have one of two choices. One is to defer the payout at the end of a four-year period, or to actually pay it every year in the anniversary period that comes in, or to convert into equity. All options are still open. The decision on converting to equity has to be taken in January, but the other two decisions are decisions that can be taken every year. The reason I wanna make this point is that as the At the end of the day, we don't want to see this deferment as an opportunity for us to be fiscally not prudent. I think we have to be prudent. We have to make sure that the business continues to be lean, continues to invest where the growth is. We believe there's massive growth in data centers and broadband, in the enterprise business, in our digital assets, and of course, in rolling out 5G networks. At the same time, we are conscious of our leverage profile. We could have easily pulled the plug on the rights issue. We didn't do it because we wanted to ensure that despite the deferment, we were comfortable on our balance sheet. I think that just tells you how we think. We wanna make sure that we have enough cushion and room for growth, but at the same time, we wanna balance that with tremendous fiscal prudence. I think that's the way we are looking at it. Yeah. Thanks so much for taking my questions, and thanks so much. Have a good one. Harjeet, anything to add on this? No, I think, Gopal, you were fairly comprehensive. The only small quick addition which I can do, Manish, to your question is, globally, there will be a free cash flow profile, which you can see now last two, three quarters. As it keeps growing with India opportunity, the tariff hikes, et cetera, the focus remains to what Gopal said. We have very modular, small sort of 40, 50 installments available in debt profile, whether it's deferred or, you know, originally scheduled at the rear end, et cetera. Each of these is a, you know, a potentially pre-payable opportunity. In the near term, the focus remains to find a higher cost smaller slice wherever we can get a chance repay that, lower the debt profile. Globally, we are sub three, but India we are still over 3.5, so there is opportunity to work on further reduction. Knowing very well that some of the non-routine requirements, whether it's 5G or whenever it happens, and the upfront payments will be rights funded in a way because we have got deferred calls available. The sum and substance of what your question was, whether dividends need to be worked through or retire the debt, the immediate term focus is to manage the debt a little more, reduce high cost debt. Thank you again and all the best. Thank you very much, Mr. Adukia. The next question comes from Mr. Aditya Bansal. Mr. Bansal, you may please unmute your side, introduce yourself and ask your question now. Hi, this is Aditya Bansal from Nomura. Couple of questions from my side. Can you share some color on the traction that we are seeing on the bulk data plans and any plans to transition from daily data usage plan to bulk data with lower monthly usage? Secondly, it seems we are seeing healthy metrics even on the B2B subs. What would be driving this? Is it M2M or new product launches? And how would the ARPU profile differ on different services that we are offering on enterprise? Aditya, on the bulk data plans, the simple answer to your question is that no, there is no traction. I think it is at a high premium to the daily plans. This is not seeing traction. I think we will look at, you know, rationalizing these plans at the right point, given the very low levels of traction, because we believe in actually simplifying the price portfolio and making sure that we have a clean and simple pricing structure in the market. On B2B, we're seeing growth of IoT. First of all, I think we are almost at a 44%-45% market share in IoT now based on the Frost & Sullivan. So, in fact, added market share even this quarter. We built our own M2M platform. We were earlier in conversations with many players. I think a lot of feedback from the back, Aditya. We were in conversation with several players around the world to actually use the M2M platform of theirs. We found that it was, A, expensive and, B, not as agile and flexible as we wanted it to. We spent a bunch of time, around nine-12 months, actually building it out. We have a very, very strong platform, meets every single need. Actually has releases coming in every two weeks. This platform is getting more and more agile and scalable, and we think that this is infinitely elastic to actually pick up any number of customers on IoT. That's one tailwind that we're seeing. Of course, the ARPU for M2M individual devices are low because the amount of data consumption is also low. Typically, they use, you know, less than an MB a month. It's large accounts. You know, you typically have, let's say, 200,000 M2M connections distributed across the country or maybe 500,000 M2M connections distributed across the country. This could be cars, electric meters and so on and so forth. The other place where we do see traction is our B2B corporate mobility plans, where we have a strong reason to win because people really value our privacy, our security, our transparency, and essentially trust us with deep relationships and long-standing reputation that we've built over the years. Finally, I think the other place we're seeing traction on B2B is on the SaaS-based platform, which is the communication platform as a service, both Airtel IQ and so on, where we're now onboarding more and more customers as we speak. Almost, I would say most of the tech companies, a number of the banks, some manufacturing entities. This is really, like, scaling up quite nicely. Thank you, Gopal. Lastly, one of our peers is beefing up content through various sports rights deals. What are our thoughts here, and are we looking at upcoming IPL or something like that? I would say it's premature to talk about that. From our perspective, I think just to you know, if you look at our content strategy, and I recall having this conversation maybe a couple of years ago, where we were a little confused a few years ago, probably about five years ago, where you know, 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, particularly in Mumbai. I think we really had to you know, really take a deep, hard look at ourselves and say, "What do you really wanna do?" I think we've come to the conclusion that we are not in the business of actually producing content. We are in the business of aggregating content and monetizing content through the subscription of our digital layer with the scale that we're able to build. That is across screens, by the way. 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. On the smaller screen, anyone who buys it will ultimately want to monetize it. Like we've done with Hotstar, we've done a deal with them where we are, you know, their content is available to our customers, and we bundle it with our services. I think we don't see the value, at least we did not see the value, in putting in INR several thousand crores into producing content, in a model that the monetization is always gonna be a challenge, particularly in a market only in India. If you're doing it globally, it's a different matter. If you're focused on India, then content monetization through the small screen is not as easy. You can see that struggle that all OTT companies in India, particularly the long tail, are actually going through. Commented. Mr. Aditya Bansal, kindly click on unmute myself in the pop-up on screen. We get it. Thanks a lot. Thank you very much, Mr. Bansal. The next question comes from Mr. Pranav Kshatriya. Mr. Kshatriya, you may please unmute your side, introduce yourself and ask your question now. Hi. Thanks for the opportunity. This is Pranav Kshatriya from Edelweiss. I have a question regarding the CapEx. If you look at, you know, the CapEx has been pretty sticky. Last quarter, the explanation was that since you have used some of the spectrum, you know, that has been rolled out for which the CapEx was high. This quarter, it was slightly higher than the previous quarter. How should we see the CapEx for this year? And for FY 2023, should the CapEx trajectory be going up or going down? And what is the nature of the CapEx? Is this more to do with the fiberization or are you preparing for 5G readiness? What exactly is the nature of this CapEx? Thank you. I think, Pranav, taking the last part of your question first, I think we've given a broad guidance about our CapEx for the year. I think that pretty much stays. We did see a bump up on CapEx because some of the 900 band, you know, spectrum that we had, there were material shortages in quarter one, and a lot of that actually started coming in into quarter two. So we did see a bump up. The contours of this CapEx are actually across three or four areas. There's a substantial amount of money that is going onto transport. This is really to ready for 5G, fiberizing our towers, making sure that we put enough fiber on the ground. The second part is really modular CapEx on the radio side, where a lot of it has really been on the 900 band, new radios that we had to buy, some capacity bolstering, but largely on the new, on the 900 band, because with this additional spectrum, we didn't need as many radios on the capacity side. The third part is core, obviously just grows with whatever you're growing, but that's a modest amount of CapEx that goes there. We've not seen as much data growth, because with the lockdown we saw a big jump. As the lockdown started easing and people went back, some of the usage actually dropped. Of course, there is the non-wireless side of the portfolio, which is, you know, our data centers, our home broadband, our enterprise business. All of that also consumes CapEx. I don't think the overall numbers change. I think it's just a question of a little bump up. That said, I think we are watchful. You know, one of the reasons that we mentioned that we have raised money through the rights issue is that we don't wanna hold CapEx back for growth. I think we're very clear that we want to grow market share and grow. If we find that that opportunity is there, we will put in the requisite CapEx. At this point in time, our sense is that the numbers will stay in line with the guidance that we have provided. For next year, we haven't yet provided a guidance. Okay. A small follow-up, you know, for that. So if we are looking at 5G, what is your view on 5G? I mean, are we looking at a more staggered rollout of 5G, considering, you know, the spectrum auction will happen sometime, you know, possibly early next year, considering the 5G device penetration is still low, although incrementally we are hitting 15%-20% mark. Overall basis, I think it is still much smaller proportion. Should we see a more staggered 5G rollout, or you know, it can be more like how it happened for 4G which was, you know, almost across the length and breadth of the country? I think it's a bit early for me to comment on it for various reasons. Firstly, I think we have been, you know, indicating to the regulator that, because this matters right now with TRAI. TRAI needs to give out a recommendation to DoT, after which they will kind of finalize. Our recommendation has been to make sure that they look at all the spectrum bands, not just one spectrum band. Because, you know, you need to look at all spectrum bands to see what is the totality of spectrum that will be available in India. Much of it is sitting with the defense, so that has to be unlocked to make sure that we are able to, as operators, understand what should our spectrum strategy be. This will be spectrum in the 600 band. In the 700 band, of course, the spectrum was very high-priced. We had three failed auctions. Those need to get substantially moderated in terms of price. There's 3.5 GHz, where a lot of the spectrum is lying with defense. How much spectrum is going to be available is another question. Of course there's a millimeter wave. All of this spectrum will need to be put on the block, and I don't know whether that can happen soon. I think it will take some time, as I understand it, but we will wait and see, you know, when that consultation gets concluded. It comes to DoT, and then of course the spectrum will be put on the block. DoT in the recent reforms has suggested that every year they will keep auctioning spectrum. The second thing I want to say to you is that the 4G and 5G in the short term, and when I say short term, in the next, let's say, two years to three years, will be a little different from the way 3G and 4G were. In the case of 3G, the difference between 3G and 4G was dramatic. Dramatic in terms of experience, and by the way, because voice, you could run voice on 4G where the capacities were much lower. The fallback going onto 3G was always going to be a poorer experience for customers because you fall to 3G then come back and so on and so forth. Of course the capacities on 3G are much lower because of the nature of the technology. In the case of 4G 5G, there are two ways you can run it. One is what's called non-standalone, and the other's called standalone. Most networks across the world have moved to non-standalone. Non-standalone basically uses the 4G layer as the uplink and the 5G layer as the downlink. 5G comes as an overlay on 4G, and that changes the experience and gives you a great experience. Now, we all know that the nature of the mobile industry is modular. We know where the customers are, we know where the devices are, and so you can decide where to actually deploy based on that approach. I think there are many moving parts. We'll have to see how this actually plays out, one in terms of timing, the spectrum auction, and finally, what's the uptake on devices. In the next three to four years, you will see 5G more or less on a ubiquitous basis or more or less in most key cities. In the immediate short term, I don't know. I mean, we'll have to see what happens and when that auction happens. Thank you so much, Gopal, for the elaborate answers. I really appreciate it. Thank you very much, Mr. Kshatriya. The last question comes from Mr. Tarang Agrawal. Mr. Agrawal, you may please unmute your side, introduce yourself and ask your question now. Hello, good afternoon. This is Tarang here from Old Bridge Capital. Just wanted to understand, as you grow your enterprise data center business, is there a preference to any particular source of power? How are your, you know, customers looking at it? Is there a preference there or some sort of an apprehension from the point of view of the source of power that's being used? No, I think this is a good question. I think, you know, we have almost all of the hyperscalers now in our portfolio as customers on data centers. We are very clear that, you know, based on the Paris Agreement that we have signed up, that more and more of the energy that we use has to be green energy. Most of the large data center units are already green for us. We've invested in back-to-back power arrangements using solar power to drive those data centers, and this is something that is only getting better. You know, we intend to disclose this as well as part of our sustainability initiatives in the coming quarters. Great. Thank you. Thank you very much, Mr. Agrawal. With this, I will now hand over the proceedings to Mr. Gopal Vittal for closing remarks. Well, I just wanna thank you for dialing in and for all the participants. You know, Happy Diwali. Thank you very much for being with us. Thank you everyone for joining us today. Recording of this webinar will also be available on our website for your reference. Thank you.