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Airtel banks on advertising to lead digital business growth

Airtel banks on advertising to lead digital business growth
Photo Credit: VCCircle
19 Jul, 2022
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Bharti Airtel is looking at building its advertising business over the next 10 years into a multi-billion-dollar revenue generator on the back of its ability to connect the world’s largest advertisers to its base of more than 360 million own consumers.

Airtel Digital, the carriers’ arm focusing on digital initiatives, is aiming at running over 3,000 campaigns for leading brands, beginning with the auto and FMCG spaces, before expanding to other verticals across industries.

Airtel Digital’s chief executive officer Adarsh Nair told Mint that the carrier will take further steps to monetise data on the network, to create business streams from not just advertising but also from gaming, entertainment, music, cybersecurity, cloud for SMEs and communication platforms as a service.

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“These four businesses contribute about ₹1,000 crore in revenues and one part of it is advertising which is leading since we started it earlier. We’re already seeing a 200% yoy growth in revenue and we expect this pace to continue for the years to come,” he said.

The carrier is banking on first-party data of its large customer base across telecom, DTH and fibre to home, which can be dissected to provide targetted advertising to customers. Nair said that the carrier was not investing anything into the business but was generating revenue creating a complete upside for sustainable growth for the ventures.

“We’re also working on location-based advertising based on consent from the consumer, which will be a big revenue generator. We’ve piloted it and we’re waiting for the data laws to roll it out fully because it needs a consent framework,” Nair added.

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Location based advertising will work on geo-fencing which targets consumers in a small pocket of geographical area, such as a mall, and brands can offer discounts or promotions to consumers in that area through the carrier’s ad service network.

Through a partnership with hybrid blockchain platform provider Aqilliz in which Airtel has acquired a strategic stake early this year, users will be able to register their consent for various brands that will be connected to the platform through their databases.

“Users will be in control of the advertising that comes to them, enabled by blockchain, so we will put this out once the data laws and consent frameworks (are established),” he added.

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Nair said that Airtel was well placed to pitch its advertising services with nearly 200 million people digitally interacting with the brand, more than 2,000 enterprises and over 1000 SMEs that were already buying products from the carrier.

Monetisation from the network is an essential progression for the country’s No 2 carrier as it battles Reliance Jio and Vodafone Idea for getting the larger share of revenues from over 1 billion mobile customers, many of who use data services.

Years of tariff wars after the advent of Reliance Jio, which brought down data tariffs to the lowest in the world and introduced free voice calls, eroded telco profits and squeezed margins giving way to a three player market. The carriers have begun raising tariffs since December 2019 but have also realised that they can no longer be just dumb pipes and have to look at more ways of monetising.

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“Our companies have woken up very late. Trillions of dollars of valuations have transferred to the OTT players whether it is Facebook, Google, and now e-commerce, and they all ride on us. We spend billions and they enjoy trillions of valuation. That is the equation. So, we have decided that we just can’t let everything go out. We need to be serving and doing value-add,” said Bharti Enterprises chairman Sunil Mittal at an event in May, underlining the need for growing its digital business streams, which is already 3000 people strong.

Airtel isn’t the only one getting into additional streams, Vodafone Idea also announced its venture into advertising, and partnerships for products beyond pure telecom services such as job search and education, while Reliance Jio has been investing in start-ups.