Airtel to steer clear of GPU-as-a-service for now, focus on data centre business

“The GPU-as-a-service, we have currently decided to park that because things are changing very fast in that space, the cost of the quality of the chips and the efficiency of the chips. Also, the money that you make on GPU-as-a-service, a lot of it is dependent on sophisticated work around how you manage those workloads,” Vittal said, giving the rationale behind the company’s decision.

“We’ve done multiple workshops to really understand the space well, and we’ve decided that we’ll not be an early mover in the GPU-as-a-service, but AI data centres, the data centre business continues to remain a focus for us. We are trying to see how we can expand it,” he added. Airtel’s data centre business is housed under Nxtra Data Ltd, which is among the leading Indian players.

GPU-as-a-service refers to cloud computing service that provides access to GPUs on demand for workloads such as machine learning, deep learning, gaming, video editing and high-performance computing. Users can rent GPUs from a cloud provider, and use them to accelerate their workloads, which can be more cost-effective than purchasing and maintaining their own GPUs. The service is being provided by rival Jio Platforms and other telecom services companies such as Tata Communications, besides data centre companies including E2E Networks, Ctrls Datacenters and Yotta Data Services.

FWA rollout on standby as 5G drives capex

Vittal said that Airtel was set to launch fixed wireless access (FWA) service on standalone technology, or high-speed internet, across the country, but will do so when needed.

“We have already tested fully the standalone solution for FWA. We have proven it. We are fully ready to launch FWA. We can do it tomorrow morning if we want to… we will do it at the point that we need to,” he said.

Over the past two quarters, Airtel has improved its FWA availability, expanding it to cover more than 2,000 cities. About 1.9 million fiber to the home or home passes were getting added each quarter, bringing the total home pass count to 35 million. Rival Reliance Jio is also aggressively pushing its FWA service.

With its 5G user base reaching 120 million, Vittal noted that future capital expenditure will be channeled towards 5G, homes and broadband, with no further investments being made towards 4G capacities. The telco will also look towards acquisitions in the B2B space on the back of healthy cash flows. “We’ll be selective and very prudent in any investments we make. We are looking at investments into adjacencies in B2B in some of these digital areas. Obviously, these will be bolt-on acquisitions,” he said.

Airtel offloads towers as profits soar on Indus gain

Airtel also decided to exit the low-margin global wholesale voice and messaging business, which Vittal said would impact the revenue in the coming quarters as the transition would take six months.

“However, let me emphasize that this exit will have no impact on Ebitda, as this business contributes only marginally. Within the domestic segment, we are witnessing strong growth in digital services and sustained growth in connectivity,” he said.

Vittal added that Airtel will be selling its tower assets to subsidiary Indus Towers, which will own and manage them alongside those of Bharti Hexacom.

“Our belief is that this business is best managed by Indus. Since they know how to do this better than us. It will not only free up management bandwidth within Airtel, but also create greater efficiency, scale and ultimately long-term value at Indus,” Vittal noted.

On Thursday, Indus Towers said it will acquire 16,100 towers, ultra-lean sites and cell-on-wheels from Bharti Airtel and Bharti Hexacom through a slump sale for ₹3,308.7 crore. Expected to be completed by March-end, the sale will be done at an arm’s length and will help the company add more towers to its portfolio of 234,643 towers, improving its market share.

Airtel reported profits of ₹14,760 crore for the quarter ended December, up 483% from ₹2,530 crore a year earlier, due to a one-time gain from Indus Towers becoming its subsidiary in November. Adjusted for Indus Towers’ financials, Airtel’s profits rose 121.3% to ₹5,514 crore, with the full impact of the June 2024 tariff hikes coming through, and customers moving to higher-priced plans. Consolidated revenue for the quarter was ₹45,129 crore, rising 19% year-on-year, while earnings before interest, tax, depreciation and amortization (Ebitda) rose 24% to ₹24,880 crore. Ebitda margin rose to 55.1% from 52.9% a year prior.