Spend-IT: Airtel’s IT expenditure hits a new high, growth decelerates

Sunil Mittal, the chairman of India’s second-largest mobile operator, Bharti Airtel said in the FY24 annual report that digital technology is at the core of the company’s strategy. It has enabled Airtel to attract high-value customers, increase customer base, and drive cost efficiencies. Commensurate to this statement, the company’s IT spending for the annual year ending March 31, 2024 is reported to be about ₹700 crore.

The expenditure has increased from FY23’s IT spending of ₹658 crore. While the spending has increased by 6% in the last year, the percentage growth has significantly decreased from 23% in FY23. Notably, for the same period, the revenue growth has reduced from 18% in FY23 to 8% in FY24 at ₹1,49,982 crore. Notably, the consolidated performance was hit by the devaluation of African currencies, particularly Nigerian Naira. 

The company did not respond to TechCircle’s query.

Airtel’s business model is centered around three key areas — digital infrastructure, digital experience, and digital services. The company is building large-scale data infrastructure to power innovative digital products, including over 30 artificial intelligence (AI) and machine learning (ML) use cases. 

“Fuelled with customer obsession and innovation, Airtel is harnessing the power of platforms, ushering in a new era of digital products and services. Our digital infrastructure platform stores over 100 petabytes of data. We have incubated multiple digital platforms and services — most of them built in-house,” said Mittal in the annual report.

The ‘exceptional’ in-house digital talent has helped the firm drive digital innovation. The digital portfolio of the company which includes Airtel IQ, Airtel IoT, Ads, SD-WAN, Cloud, Airtel Finance, our workflow app Airtel Works, and the ASON platform, and other have been developed by internal team, the company claims. The digital team, as of FY24, comprises of more than 2,800 engineering talent. The workforce has grown by over 20% since FY22. 

Airtel also credits strategic partnerships for playing a crucial role in driving its innovation and developing world-class solutions to tackle challenges. The company has partnerships with Ericsson, Nokia Siemens Networks (NSN), Huawei, Cisco, IBM, Avaya, ZTE, and Google enables it to co-create innovative and customised solutions. Additionally, in January 2024, Airtel acquired 97.1% stake in equipment manufacturer Beetel Teletech along with its 49% stake in design solutions company Dixon Electro appliances.

“The digital transformation has enabled us to deliver accelerated growth in the form of industry beating ARPU (average revenue per user), reduced churn, and improved productivity, while enabling us to serve customers in an omnichannel way,” the company said in its annual report.