Bharti Airtel Ltd (NSE: BHARTIARTL) Q3 2026 Earnings Call dated Feb. 06, 2026
Corporate Participants:
Soumen Ray — Chief Financial Officer
Shashwat Sharma — Chief Executive Officer
Gopal Vittal — Vice Chairman & Managing Director
Analysts:
Manish Adukia — Analyst
Piyush Choudhary — Analyst
Sanjesh Jain — Analyst
Vivekanand Subbaraman — Analyst
Gaurav Rateria — Analyst
Pranav Kshatriya — Analyst
Arun Prasath — Analyst
Gaurav Malhotra — Analyst
Presentation:
operator
Attendee and will be muted throughout the meeting of 2025 earnings webinar. Present with us today is the senior leadership team of Bharti Airtel and Bharti Hexacom Ltd. 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 and A session. Interested participants may click on Raise hand option on your Zoom application to join the Q and A queue. The participants may click this option during the Management Opening Remarks itself to ensure that they find a place in the queue.
Upon announcement of name participants to kindly click on Unmute myself in the pop up screen and start asking the question post Introduction with this I would now like to hand over to Mr. Soman Ray for his opening remarks.
Soumen Ray — Chief Financial Officer
Thank you Vidhi. Good afternoon and a very warm welcome to all of you. I have with me Gopal, Shashwat, Akhil and Naval. I’ll provide an update on our consolidated financials for the third quarter post which I’ll hand over to Shashwat to share highlights of our India business including strategic priorities. We delivered another quarter of strong performance across India and Africa. Consolidated revenue came in at about 54,000 crores, growing 3.5% sequentially. Africa maintained its trajectory of solid performance with constant currency revenue growth of 5.8%. India excluding passive infra grew at 2.1% sequentially. India mobile delivered another quarter of strong revenue growth.
Broadband saw sustained growth momentum. IPTV is scaling up rapidly and powering our convergence strategy. Underlying B2B performance improved sequentially. Digital portfolio is on a strong growth path. More details on these pillars would be shared by Shashwat in his section. Consolidated EBITDA came in at over 27,700 crores, a growth of 4.2%. Our EBITDAL margin stood at 51.3% which is about 30 basis points improvement sequentially. Operating free cash flow, which is EBITDAL minus capex was a strong 15,900 crores. Capex for the quarter was about 11,800 crores. Our operational excellence continues to be driven by our focus on portfolio premiumization, disciplined execution and tight control over costs through our War on waste initiatives.
India EBITDAL excluding passive infra came in at over 18,450 crores, growing at 2.8% sequentially. EBITDAL margins stood at 51.8% again a 30 basis points improvement. CAPEX for the quarter was at about 7,100 crore operating free cash flow which is EBITDAL minus capex was strong at over 11,350 crores. Our consolidated net debt to EBITDA improved to 1.02 with India now at 1.38. Our strong balance sheet demonstrates prudent capital allocation disciplined capex sustained operational excellence. Continued focus on balance sheet improvement is recognized by leading global agencies with rating upgrade during the quarter I’ll now provide an update on our investments and synergies that we are driving across India and Africa.
Our investments are directed towards growth areas to future proof Airtel as well as Gold Plate our infrastructure to make it best in class for the years to come. We will judiciously invest to improve our footprint on network sites as well as on transport. In addition, we are investing across digital portfolio. This combination will help us drive competitive and profitable growth to ensure prudent capital recycling in future. On synergies we see significant opportunities between India and Africa that include first portfolio premiumization, second accelerating digital and growth in B2B third war on waste which is central to us running our operations.
Lastly, we are excited about the impact of the group wide synergies that are now coming to bear in stepping up our performance in Africa. A number of areas have been picked up in this effort. One such area, our entire tech stack has now been deployed into Africa. This is helping sharpen our go to market capability, our secret source of Airtel and leading to stepped up revenue growth in Africa. We believe there is a lot more to do around this. With this I’ll now hand over to Shashwat for a detailed update on India business.
Shashwat Sharma — Chief Executive Officer
Good afternoon everyone. Let me share with you an update on esg. Then each of our business segments followed with an update on our strategic priorities. Our ESG progress is being driven by the strategic use of technology and and digital innovation enabling more sustainable operations and greater efficiency. During the quarter we solarized over 3,000 new sites taking our total solar site count to 38,000. Today I’ll talk about the work our foundation is doing in providing access to quality education to underprivileged children. Over time our focus is increasingly on digital inclusion across schools, helping bridge the learning and opportunity gaps for students who need it the most.
155 Satya Bharati schools are spread across four states and are reaching 36,000 students. Girls compromise about 51% of this enrollment. Through the Quality Support Program we have reached over 4.2 lakh students in over 1100 government schools across 12 states and Union territories. The foundation is also partnering with the nisi, AI OAK and multiple state governments, supporting the Teacher Professional Development Program through the Teacher App. Additionally, the foundation supports higher education with reputed national level institutions and various scholarships. Lastly, we take pride in our transparent disclosures and high standards of governance including ethics Moving to a quick update on our businesses Overall, our strategy of portfolio premiumization and execution rigor is delivering consistent performance.
We continue to invest strongly on strengthening our Networks, adding about 11,000 5G sites in the quarter. We now cover about 74% of population with 5G. Our step up on fiber deployment continues strongly. We rolled out over 11,000 kilometers of overall fiber and added about 2 million fiber home passes in the quarter. In Mobility we added 4.4 million revenue earning customers and 5.2 million smartphone data consumers during the quarter. ARPU came in at rs259, led by our continued efforts on premiumizing and improving our portfolio mix. Postpaid net add came in at 0.6 million. International roaming is emerging as a focus area where we see a large growth opportunity.
We continue to simplify our offering while enhancing our value and experience. Our efforts are yielding strong outcomes in international roaming revenues and they are growing at over 30% year over year. I want to emphasize that in the absence of tariff repair we will continue to sweat ARPU growth leveraging feature phone to smartphone upgrades, prepaid to postpaid upgrades, data monetization and our international roaming services. Our 5G expansion is progressing as planned. I will delve deeper into in a bit. We ended the quarter at 181 million 5G customers. Our share in 5G shipments is seeing sustained improvement.
5G handset penetration continues to grow and over 90% of our total smartphones today come in as 5G. On broadband, we delivered another strong quarter with our highest ever quarterly net adds of 1.2 million customers. We have crossed 13 million installed connected homes customer base FWA continues to expand addressable market for us and we are deepening our supply footprint with fwa. This is reflected in strong momentum in FWA customer base which now stands over 3 million. On digital TV, we added 73,000 customers during the quarter. The DTH industry continues to face macro headwinds. We are prioritizing profitable growth here.
At the same time we are seeing a very strong traction on our IPTV offering which is driving strong momentum in customer growth. Moving to Airtel business, its revenues came in at 5350 crores, growing 1.5% sequentially. Our order book and funnel is strong. During the quarter we secured multiple Deals on connectivity and adjacencies including Airtel, cloud, cybersecurity and IoT business. NextStraw is seeing strong growth led by capacity augmentation and customer wins. Our digital portfolio delivered robust revenue growth and grew 39% over last year. We continue to make strategic investments in our digital portfolio spanning across cloud, Cybersecurity, Financial Services, IoT and CPaaS.
Airtel Finance is delivering strong growth in loan disbursements and EMI card issuances. Monthly loan disbursement run rate now stands at over 500 crores. Payment banks, its MTU stand at about 108 million. Analyzed revenue run rate is now crossed 3250 crores and it’s growing sequentially year on year at 16%. Deposits remain strong at about 0.300 crores growing 28% over a year. Let me now provide an update on our strategic pillars. First, our diversified and resilient portfolio. Underlying performance across the portfolio was strong. Africa accounts for about 27% of our revenues, India Mobile 53, India Non Mobile 13 and India 7.
Our investments underpin our long term strategy that is of future proofing Airtel through digitally powered networks, a sharper growth oriented portfolio and building scalable digital services. Second area is winning quality customers. Let me start with broadband. We continue to see large opportunity ahead of us in this market with a potential of 100 million connected homes over the medium term, FWA is expanding addressable market and supply and is accelerating adoption. To capitalize on this opportunity we are focusing in three areas. First is to accelerate our supply through rapid network expansion led by fiber and deepening our FWA footprint.
With 5G rollouts over the last two years we have expanded our fiber footprint in over 300 additional cities. We now have fiber presence in over 1500 cities while FWA live in over 3200 cities. Second focus area is to offer content as the primary use case to drive adoption and customer engagement. For this we offer a most comprehensive booking of regional and global content through more than 29 OTD platforms bundled with over 650 TV channels. The third focus area is to drive growth across our channels. Over the last few quarters we have integrated our channels and all our channels now sell all services which has driven our acceleration.
We see significant headrooms ahead to sweat our distribution network by leveraging digital tools and data science to improve the quality of acquisitions and productivity in our channels. Let me now switch to mobility. Portfolio Premiumization through persuasion and data science continues to unlock ARPU for us. Our strategy is to upgrade 90 million credit score customers to our postpaid services. As I mentioned earlier, we see a significant opportunity in international roaming portfolio. Our rural expansion continues its growth momentum while we continue to strengthen our 5G footprint in line with the handset growth that we are seeing in the industry.
Let me now turn to B2B. I’ll provide some texture on our revenue construct. First, about 45% of our revenue comes from core connectivity. This is an industry that is growing at 5 to 6% annually. Here we are growing competitively and strengthening our leadership position. Another 30% of our revenues come from our digital portfolios and the adjacency which is growing at about 20% and the remaining 25% is contributed by wholesale data invoice. Here the growth is a bit challenged. We see large growth opportunities across core connectivity, data center, digital and adjacencies. To capitalize on the growth opportunities, we are deeply focused on three areas.
First is to build low latency flapless fiber networks, expand our subsea cable presence, augment data center to data center connectivity and our OPGW infrastructure. This will help us accelerate our core connectivity growth from data center and lock in enterprise customers. Second, we have stepped up our investment in data centers business under Nextra. Our plan is to reach 1 gigawatt capacity in the next three to four years and grow significantly ahead of the market. Third, we are strengthening our capabilities in the digital portfolio. There’s a Portfolio of Cloud, IoT, Cybersecurity, CPaaS and SD WAN in Airtel Cloud.
We are investing in building a suite of products and services. Our cloud business is already seeing strong traction within a short span of time. We have signed over 16 deals with over 300 ongoing conversations with customers across sectors with a focus on BFSI and manufacturing. Our digital stack where our engagement with existing customers are getting deeper and we have conversations with multiple potential customers that are at advanced stages. The third pillar of our strategy is the obsession to deliver brilliant customer experience. Delivering an exceptional customer experience remains paramount for us. Our Digital experience layer, powered by converged data engine, is driving greater velocity in our ways of working and enabling deeper customer engagement.
This continues to be an underlying driver of consistency in our performance. We have made significant progress in enhancing network performance with digital tools and data science. We have now rolled out 5G standalone pan India on both FW and mobile services. Most of our FWA customers across circles are now on 5G standalone network experiencing superior uplink speeds. The mobile customer base is transitioning in a phased manner to sa keeping customer experience in mind. As stated before, we will continue to run both SA and NSA modes of 5G for our mobile customers based on their handset readiness to deliver optimum experience to drive our next leg of growth.
We are also stepping up investments towards building further resiliency in our transport network and also in modernizing our overall networks. Our incremental spend will be directed towards growth areas including acceleration in data centers and some pullback of 5G capex with growing device adoption. This we see as a critical step to future proof our seamless experience to our customers and unlock growth potential. The fourth pillar of our strategy is to build and leverage our digital capabilities. We are now embedding AI at the center of everything we do, marking a clear shift from experimentation to scaled up and business wise deployment.
For us, AI is anchored on four core objectives. The first is to accelerate revenue growth through persuasion and precision based targeting for our customers. Second is building differentiation in our products and offerings. Our industry first AI powered Anti Spam solution continues to deliver significant relief to our customers. Since its launch it has identified over 71 billion spam calls, 2.9 billion spam SMS and blocked over 7 lakh prominent links. We continue to add features to our anti spam solution and you will hear more on this in the quarters to come. Third is to drive operational excellence through AI and lowering costs and improving productivity and the fourth area is to help elevate our customer experience with proactive fault management and self healing network tools.
Our AI models are continuously evolving and generating deeper insights fundamentally reshaping our ways of working. Let me share a few examples first. Today AI dynamically optimizes power for our radio layers based on real time traffic through an automated cell wake and sleep cycles powered by intelligent traffic profiling leading to significant cost savings without any human intervention. Our capacity planning for new rollouts is now deeply backed by data science enabling precision in decision making. This is reflected in our cost effective rollout expansion that we have done of over 45,000 rural sites. Nearly 70% of all our customer calls are today handled by self serving voice bots, significantly improving customer experience, service quality and frontline productivity.
The fifth and last pillar of our strategy is war on waste. We continue to de average our costs through to identify and eliminate wasteful spends. We are leveraging AI and digital tools to amplify our efforts and drive sustainable savings. A prime example of this is our site running cost which has declined by over 6% in last four years despite accelerated rollouts and addition of new technology layers. So to sum up overall we delivered another quarter of steady performance underpinned by strength of our diversified portfolio and razor sharp execution. We see significant growth opportunities in ARPU led growth, postpaid broadband and B2B.
Our investments across the portfolio are focused towards unlocking these opportunities as a new bets to future proof. Airtech digital acceleration and AI adoption is central to our strategy. Our balance sheet strength underscores our disciplined capital allocation focus on deleveraging and sustained operational excellence, creating a solid foundation for future growth investments. With that, let me hand it over back to Vaide for the Q and A session.
Questions and Answers:
operator
Thank you very much Ashwath. We will now begin the Bharti Airtel Q and A interactive session for all the participants. Please note that the Q and A session will be restricted to the analyst and investor community only due to time constraints. We would request if you could limit the number of questions to two per participant to enable more participation. Interested participants may click on Raise hand option on the Zoom application to join the Q and A queue upon announcement of name participants to kindly click on Unmute myself in the pop up screen and start asking the question post.
Participants are requested to limit their questions to Bharti Airtel till 3.30pm as the management will start the Q and A discussion on Bharti Hexacom from 3:30 onwards. With this, the first question comes from Mr. Manish Adukya. Mr. Adukya, you may please unmute yourself, introduce yourself and ask your question now.
Manish Adukia
Hi, good afternoon. This is Manisha Rukia from Goldman Sachs. Thank you so much for taking my question and Shashat, congratulations on your new role. Couple of questions. First, when I look at let’s say your wireless business, I think for the first time since before COVID or for the last five or six years, your revenue growth has fallen to below 10%. And while we do see the evidence of premiumization in terms of data or postpaid subscriber ads, the fact is that as the base becomes larger, the revenue drive growth probably ends up becoming smaller and smaller.
So in that context, and I know you’ve talked about tariff repair in the past, but till what extent would you be okay for your revenue growth to decelerate before you take a view that you definitely need to take the first step from a tariff repair perspective and without that, how are you thinking about revenue growth potentially accelerating in the foreseeable future in that segment? That’s my first question. Thank you.
Soumen Ray
So maybe I’ll take that. I think yes, there has been Manish an overall sort of softening in market growth on wireless. I think that’s been the case for the last couple of years market growth in wireless has been averaging about 6% and if you strip out tariff repair the drivers of premiumization continue to be the same as we’ve always seen, you know which is the feature phone to smartphones, prepaid to postpaid data penetration, international roaming. So all of that remain intact. I think we have to find more creative avenues to continue to push on ARPU and I think that’s really the effort of the company in the absence of tariff repair.
Yeah,
Manish Adukia
and sorry just to probe a. Little bit deeper on that. When you say creative avenues, do we have something on the horizon or is it like still.
Soumen Ray
I mean experiments are always ongoing Manish. So you know we keep trying out stuff and we have a B testing that happens across geographies so that’s something that I think the team is, is looking at.
Manish Adukia
Got it, thank you. Second set of question just on CapEx. If you can just provide an update. I know on the previous earnings call a fair bit of discussion happened around data centers and of course since then the world on at least on AI has continued to move rapidly. Any update on your data center ambitions, Updated capex plans and in that context if also you can help us understand the rationale for calling the remaining out of the rights issue and what drove that. Thank you.
Soumen Ray
Yeah, I think, let me take the second part first Manish. I think you know there was, we’ve already sort of given that there was a time frame of three years which is now over. We had no provision to foreclose the call on the rights issue. So we’ve called it. The deployment of these funds will clearly be done to ensure long term value creation and that’s really how we will approach it as far as CapEx is concerned. I’ve always mentioned that we’ve seen in the last couple of years moderation in radio, CapEx step up in homes, CapEx step up in some of our transport CapEx.
But I think one of the places that we are not particularly satisfied about is the fact that our data center market shares are quite low. It’s a very fragmented market and we are about 12% market share on the overall data center market we have about 120 to 130 megawatts of power. So we are about, we’re on that ballpark and I sense that our sense is that in the next three to four years this will become about a gigawatt type market and sorry we will have about a gigawatt capacity which will give us about 25% share.
So we are committed to stepping up investments in data centers. I think at this point in time I can’t give you a capex guidance, but clearly you will see us investing more and more behind data centers. I think there’s no question about that in my mind.
Manish Adukia
Thanks a lot. Maybe just one last question if I can sneak in. The AGR issue just doesn’t seem to go away. And now with Vodafone ID having gotten this AGR relief and your own EGR payment starting in March, about a billion dollars and you obviously also have recurring Spectrum payouts which Vodafone idea has gotten converted to equity. So I think in that context, how are you thinking about your repayment liabilities for the government of India both for AGR and Spectrum? I mean, what do you think are the likely potential outcomes or scenarios through which maybe you also could have a lower cash flow payout or pressure from these two spectrum in egf? Any thoughts there? Thank you.
Soumen Ray
We have written a few letters to the DOT asking for clarification and basically requesting parity on the treatment of the AGR dues. We are yet to hear from the dot. Once we hear from the dot, we will then decide what our next steps are. So I think that that’s all that we have actually information on the agr. These letters have already been sent and we are awaiting their response.
Manish Adukia
Got it. Thank you for taking my questions. All the best.
operator
The next question comes from Mr. Piyush Chaudhary. Mr. Chaudhary, you may please unmute your side, introduce yourself and ask your question now.
Piyush Choudhary
Yeah, hi, good afternoon, this is Piyush from hsbc. First question. You know, again just on the capital allocation strategy and the use of money which is coming from the rights issue given you know, free cash flow is improving and deleveraging is also happened. Is there a probability that we can also think of a special dividend or stepping up meaningfully on the dividend and if you can share some light on this. Secondly, just on the data center business, Singtel has announced to acquire stake in STDGDC earlier this week, which has also a good footprint in India.
Could there be opportunities for Airtel and STTGDC in India to partner together and accelerate the pace of DC rollout? Is that something which is possible?
Soumen Ray
Yeah. Thank you Piyush for both those questions. I think, you know, I think we have always mentioned that as far as dividend is concerned, we will see a progressive dividend policy. You’ve already seen that play out over the last couple of years. You will continue to see that play out. And I think the. The rights issue has really nothing to do with that at this stage. The rights issue was a call because, as I mentioned, you know, we didn’t have an option to foreclose it. And capital allocation, as far as we’re concerned, will be really, you know, first and foremost, our investments will be directed on the core.
The core business. The second area of focus will be around adjacencies, which you already talked about. Data centers, cloud, you know, increasingly some of the scaling, some of our lending businesses and financial services businesses. And, you know, many years ago we also invested in Africa. That has turned out to be an excellent investment. It’s given us tremendous resilience in the portfolio. So I think capital allocation will continue to be along these areas. On the data center side. Yeah, we all seen the announcement by STT and Singtel, and there could be opportunities. I think the opportunities like this keep coming to us.
We have nothing to report at this point in time because it’s still sort of very early days. So we’ll wait and watch how that plays out.
Piyush Choudhary
Sure. And if I may just ask one thing, you had this publicity pro offer, so could you update, like, how many customers are using it? How is the data usage for that cohort of customers? And are you seeing increasing uploads from users which have adopted AI which could warrant any changes in network design from a upload capacity perspective? Thanks.
Soumen Ray
It’s too early. I think the thesis that Globally is being talked about is that there could be some implications on AI and the way uplink performance or the uplink strategy needs to be planned for in the network design, but it is too small at this point in time to make a meaningful impact. And this is not just in India. This is all across the world. Had many conversations with several telcos. It’s still not sort of playing out yet. On Perplexity, we’re not going to disclose the exact numbers, but I would say that there has been a very significant uptake of customers.
In fact, the first few days of the launch, we saw it reaching a few millions. And some of the revenue streams that can be driven out of this is the adoption of a paid package and Perplexity, which will give us a revenue share as well. So I think that’s really the way we see it. But this was a sampling exercise that Perplexity was keen to do on the Airtel base, given the quality of the user.
Piyush Choudhary
Got it. Thanks, Kupal.
operator
The next question comes to Mr. Sanjesh Jain. Mr. Jain, you may please unmute your side. Introduce yourself and ask your question now.
Sanjesh Jain
Hi, this is Sanjay from ICICI Security. Thanks for taking my questions. First on the 5G side we have seen a decent adoption and on the other end we are seeing the revenue growth decelerating. Can we think of more differentiated pricing between the 4g? 5g? We know that we start with 2gb but that’s only 50 rupees. Kind of a premiumization anything, anything there. Are we thinking in terms of accelerating the 5G pricing faster than the 4G? That’s number one. Number two, I think 5G also gives us an opportunity to provide a differentiated priority based services because it gives a spectrum slicing kind of and capability that can also bring in a lot of premiumization or a customer who are willing to pay for the better quality services.
Can these kind of offerings possible in India today? We still see a regulatory hurdle for this.
Gopal Vittal
Shashwa, do you want to take that?
Shashwat Sharma
Yeah Gopal, I’ll answer that. So Sanjeev, thank you for that. I think first of all on 5G pricing, I think for the customer the 5G versus 4G pricing will have to rethink. But the reality is customers will have to pay for data eventually if the arpus have to move up. I think we have to keep reading and look at really a differential pricing architecture where people pay more for more instead of looking at differential 5G or 4G pricing because that creates a little bit of confusion in the market and customers don’t know what they’re using.
So I think that pricing, repair and architecture discussion that we have had is still playing out and I think we need to do a lot more on that side for getting ARPU growth. Having said that, the new capabilities on 5G which is linked to slicing, network on demand or other advanced features are very much becoming a reality. I think they are lighting up capabilities across the world and it’s ready for India as well. So you’ll see this movie play out. In the next few quarters
Sanjesh Jain
but we. Are not testing any of those today. Live in some of the marketers market to see is it really a feasible option.
Shashwat Sharma
We are on market but the capabilities in our labs etc. Are pretty much we have them with us. It’s a matter of.
Sanjesh Jain
And on the regulatory hurdle. Do you see any regulatory hurdle there or any of those issues?
Gopal Vittal
I think this is Sanjay, this is a standard feature of 5G technology all over the world. So you know we’ve seen or let’s say is, you know some part of 5G technology around this SA network. We can also do it on NSA but largely on the SA network. And you’ve seen this, you know, for example T Mobile in the US has launched a, a first responder slice for the police and the defense. Singtel has done something in Singapore around certain areas. So you know you are not in any way discriminating use. What you’re doing is actually using the intrinsic feature of the technology and the massive investments that have been made for this technology warrant you to find ways to actually leverage the full potential of that technology.
So that’s really what it is. So this has nothing to do with net neutrality because there is no discrimination any way of any content. So I think this is a myth that is there in the, you know, in some, in some misplaced quarters.
Sanjesh Jain
That’s, that’s very clear. Thanks Rupal for that. My next question on the data center. Now that government has given us tax so for the cloud provider globally, are we in discussion or customer? I know it’s too early days but how do you see that opportunity panning out for our data center business?
Gopal Vittal
Yeah, as you said it’s early days but I think that the demand for data centers, our estimation is that this will certainly fuel that demand. And with the availability of land, green power which today, most of our data centers today already have the maximum use of green power, we do think that we have a role to play given our heft, our capital that we can allocate towards this and the deep relationships we have with customers all around the world. So we are certainly going to pursue this and find ways by which we can step up our data center business.
I think that’s going to be a big area of focus for the business.
Sanjesh Jain
Got it, Got it. One last question Gopal, on agr, I know you have answered it earlier but are we in discussion also for the reassessment of our dues? Because I think that will be very large and very critical for us.
Gopal Vittal
I think Sanjesh, currently we have asked for a treatment of parity and there are many areas which are, which warrant disparity. One of these areas for example is just sort of computation errors, arithmetical errors, errors of commission errors, omission and you know, so these are areas that we have written to dot on our, on an assessment which is on the basis of parity of based on the Supreme Court verdict. We as I said, you know, we are waiting to hear from them and then we’ll decide what we do from there.
Sanjesh Jain
Got it, Got it. Thanks Gopal. Thanks Ashwathal for all those answers and best of luck.
operator
The next question comes from Mr. Vivekanand Subaraman. Mr. Subaraman, you may please unmute your side, introduce yourself and ask your question now.
Vivekanand Subbaraman
Hello. Hi, I’m Vivekanand Subbaraman from Ambit Capital. My first question is on the enterprise revenue growth. Sashwath, if you could help us understand the scalability of this business now that you have mostly shared your low margin wholesale voice business, how should one think about the next three year growth trajectory from a revenue standpoint? And what are the capex opportunities outside of data centers? That’s question one. I’ll ask the second one after you answer this.
Gopal Vittal
Let me take that one Vivekananda. I think the B2B business, the B2B. Firstly let me step back and look at the B2B market. The B2B market in India, the top 500 companies account for about 65 to 70% of the overall industry. So it’s very concentrated on the top and this is not unusual to India. This is true across most parts of the world. Secondly, if you look at it, the core business, which is the core connectivity business and in the core connectivity business I would include connectivity, I would include CPaaS and things like that. Typically the growth that you see in that side of the industry are in the ballpark of 5 to 6%.
So it’s like sort of middle single digit growth. And then you’ve got the digital businesses which are things like IoT cloud security. Those businesses together are growing at almost 15 to 20% and today have become actually even larger than the connectivity business. So the opportunity there is massive. Now if you look at our portfolio, our portfolio comprises, if you leave the data center part aside, our portfolio comprises three types of businesses. One is the core business which is a core connectivity business where we have been punching well above our weight. We continue to punch well above our weight.
Our growth are well ahead of the 5, 6% which is industry growth. The second component of this business is the digital side of the portfolio which is really our cloud Cyber Security. Our IoT businesses which are now growing at about 30% but need to accelerate further because that market is very large and we have small shares in it. And the third component of the business is commodity businesses which are. One was the low margin business which we shared. The other is stuff like incoming voice which is international termination, some commodity messaging businesses. These are more or less flat.
And one of the challenges or one of the jobs to be done for us is to retool our portfolio at an accelerated pace and grow the whole of parts that are really growing rapidly, which is the digital businesses as well as the core, while managing the fact that the commodity businesses are not growing. And I think that the consequence of that, all of that is that we end up with double digit growth. For example, if you take this quarter, we had a double digit growth on the B2B business. If I remove the low margin sort of business aside because of the base effect, remember there was a low margin business in the same quarter last year.
If I shared that the underlying business is growing at 10% which should show. Up in coming quarters. If we do well now, the question is what do we do to accelerate this? The acceleration will come through the portfolio that slowly diminishes in contribution which is a commodity side, but more importantly the acceleration on the digital side and continued outperformance on core. I think that’s really the strategy on the B2B business within the digital businesses. We have made our moves already. We’ve launched our cloud for which we. Are having, as Shashwat mentioned, several conversations with customers. We’ve got our IoT business which has been doing exceedingly well. Our security business is now growing strongly. Both our soc as well as the partnerships that we’ve assembled. And all of these businesses need to grow much faster in IoT. We have done exceptionally because there we have very, very leading shares and that business has done really well and continues to do well.
Vivekanand Subbaraman
Thank you Gopal, very helpful. Just one follow up here. You mentioned about the conversations that you are having with several customers on the cloud side. Now the wins that you showcased recently on xlify cloud were telco clients. Are you also in conversation with non telco clients who could perhaps leverage on some of your solutions like Xtelify work and how likely are you to be able to win over business from those customers? And lastly in this context, who are you competing with?
Gopal Vittal
So I think you are mixing up two things and I just want to clarify. The cloud business is an India cloud meant for domestic enterprises. The conversation that I Talked about, the 16 odd deals that we signed, the multiple couple of hundred conversations that are on, is amongst domestic enterprises. It’s nothing to do with telco solutions, right? So that is one business. The other is our digital platforms which we are taking globally to other telcos because those are telco platforms and we’re taking those aside there we’ve won two deals, one of which is now getting much deeper where we’re actually winning repeat businesses across a bunch of things that we’ve already done.
The second is that we are in the final stages with another couple and we are having conversations with many more. So that is a very different business. These two businesses are not together. Both happen to run on the cloud, but one is a software business, the other is a cloud.
Vivekanand Subbaraman
Thank you, Gopal for the clarity. My second question is on your portfolio. What are the strategic actions that one should expect from your portfolio given there was a lot of activity in the last one one and a half years in this regard, you increased shareholding in Airtel Africa meaningfully. Indus has become a subsidiary and you may also have more plans in the next three years. If you can outline that, it will be great. Thank you.
Gopal Vittal
I think it’s premature for me to outline that in specific terms, but all I would say is that Africa has been a phenomenal investment for us. I think the reason that we stepped up our investment in Airtel Africa is simply because we thought it was an undervalued asset. You can see that clearly having played out the stock and the price of the African asset has all more or less doubled in the recent, let’s say five to six quarters. So this has been a really, really good asset. And the outperformance now on constant currency has always been there.
I mean, we’ve been consistently growing now for several quarters at about 20% plus and in fact now with the currency having stabilized, particularly the Naira and in fact hardened a little bit, that’s also showing through now in reported numbers because actually it’s the other way around. The reported growth is now higher than the constant currency growth. So this whole currency volatility is the only risk in Africa. But if you take a long term view over a 1012 year period, you typically factor in, let’s say a 5 to 7% devaluation per year and that’s the cost of doing business in that continent.
But that continent presents tremendous opportunity and both because it’s got a young population, penetration is low, pricing structure is good and industry structure is sorted. In most markets we operate in, we are either number one or number two in almost every country we play in. So this was the reason that we decided to invest more in Africa and that’s been proven out well. We’ll continue to look at opportunities wherever we feel there is some value to be made wherever that we feel that we don’t want to double down. So those are things that we will keep looking at as a board and decide from time to time.
Vivekanand Subbaraman
Many thanks for the rich answer. All the very best.
operator
Interested. Interested participants may click on Raise hand option on your Zoom application to join the Q&A please and upon announcement of name participants to kindly click on unmute myself in the pop up screen to start asking the question. The next question comes from Mr. Gaurav Rataria. Mr. Ratteria, you may please unmute your side, introduce yourself and ask your question now.
Gaurav Rateria
Hi, I am Gaurav from Morgan Stanley. Thanks for taking my question. I have three questions. My first one is on your net ads in the 4G oblique 5G customer base. It’s one of the best in class when you look at in the industry industry at 20 million plus on a yoy basis. But when I look at from a one year or two year perspective it used to be at 30 million. So obviously the net adds have slowed down a bit. Is it because the overall smartphone net adds have slowed down in terms of the pace of addition and what do you think would have driven that? Is it temporary? Is it a change in the replacement cycle? Any insight there will be helpful.
My second question is on your FWA incremental market share. When you look at the incremental net adds for your fwa do you look at including UVR and in that context there is room for significant improvement in the incremental market share. Would you agree with that? And the last question is on CapEx 2022 we used to be around 20,000, 22,000 crores of CapEx which we stepped up for the Rollo of 5G and then that number went up all the way to 28,000 to 34,000 crore in that range for last three years. When you look at the next three years journey, given that the accelerated rollout of 5G is behind us, do you think that the pace at which we have been incurring capex that investment will moderate in absolute terms.
Thank you.
Gopal Vittal
Shasher, do you want to take the first couple of questions?
Shashwat Sharma
Yeah Gokar, I was saying let me take the first two questions and I’ll pass on the capex back to you. On the 4G 5G net adds, you’re right about the fact that the industry seeing a slowdown in terms of the total number of net ads the industry was doing a couple of years back. I think two years back very difficult to handle why it is happening. Accepting one thing which is saying with some of the tariffs hardening over the last two cycles I think there’s been a little bit of spin consolidation that’s happened in the industry but the organic rate of and the funnel that is there in terms of now bottom end feature phones etc.
Has come down mathematically those two reasons are the only reasons I could allude to, but hard to pin down saying why this is what has led to this overall. But you’re right, the industry is seeing less net adds overall. Our share of net adds on 4G 5G have continued to hold and that’s an area we’ll continue to push at on FWA vs UBI. I think the right way of looking at this, Gaurav, is we look at it as WI Fi netags. I think for us the market and the customer facing approach is WI Fi and then you have access technology.
It could be fiber, it could be fw, it could be uvr. Now in terms of WI Fi, we have significantly upped our competitive performance, I think and we are actually quite confident that we are now leading the market. I think Gopal alluded to this last quarter which was that we look at Meta as our data for us to look at competitive performance and there we are seeing a strong performance that we are seeing. On the customer side. Our approach is fiber first. We believe that’s the best experience for the customer and we want to have as many customers as possible.
On fiber. FWA augments this and wherever we have, we have had supply gaps. We have augmented with 5G and MWA rollout as required. We’ll judiciously bring in UBR into the mix as well. But that’s how we look at it. So I’m not looking at incremental market share on FWA and UBR separately in the way we look at the business. On the CapEx, Gopal, I’ll leave it to you.
Gopal Vittal
Yeah, on CapEx, I think yes, you’re right. We had an elevated year of Capex on, which is about 34,000 crores. I think that was a couple of years back where there was a massive rollout that we were doing. I think, you know, we still have, we still have investment to make. Like I said, I think on our transport side, I think if I could find a way to invest more on transport to fiber up more towers, I think we would do it. It’s just a question of doability. So transport will continue to get its fair share.
I think the radio capex on coverage where you know, you’re talking about new sites that will, that has clearly slowed down because a large part of the country is now covered. So there will be some opportunities here and there, but that’s slowed down 5G. There still is room to continue to expand. Remember that today the devices that are coming in, almost 90% of all smartphones that are being shipped are 5G ready devices. So over time, if you play this movie forward over the next four to five years, you could have a disproportionate amount of devices with 5G and 4G slowly sort of petering off.
And that has implications on how much 5G coverage you need over time because it’s an opportunity to reform spectrum away from 5G, offload it onto a more efficient technology. So that’s really the second port of call that will keep happening over time. And the third area which I did talk about, but I will again underscore is that in the next two to three years we will see a stepped up investment in data centers. Now all of that, whether that leads to, you know, what the capex actually comes to, we’ll come to. But I think one thing that you can trust us on is that we’ll be prudent, we’ll be disciplined and we will make sure that every dollar that is spent goes to create value for us.
Gaurav Rateria
Thank you.
operator
The next question comes to Mr. Pranav Shatsiya. Mr. Shatriya, you may please unmute your side, introduce yourself and ask your question now.
Pranav Kshatriya
Hi, thanks for the opportunity. I’m Pranog Kshatriya from kglobal. My question is with respect to the capital structure of the company, if you look at the balance sheet, I think it has never been this good. Only basically 1 times net debt to EBITDA or optimal capital structure can be anywhere between two to three times net debt to ebitda. So clearly there is at least one and a half lakh crore to two lakh crore kind of, you know, capital which is available. You talked about data center rollout. Do you think, you know, that is where you can possibly look for some inorganic opportunities or you think there could be some, you know, return of capital which is possible.
How do you think we should look at the capital structure of the company over next two to three years given strong cash generation? And even if you talk about accelerated capex, that will not really suck up so much of capital. So that’s my question. Thank you.
Gopal Vittal
Yeah, Pranav, this is a very good question. I think this is on leverage. Airtel is now one of the lowest leveraged telcos globally within the industry. In fact, the external net debt, if you take the external net debt without the finance lease obligations and without the DOT debt, which is almost like a, think of the DOT debt almost like an annual payout based on our right to use. So it’s not even a debt and in a way it’s just A right to use kind of a debt. So if you remove the financial lease obligations and the DoD debt, the external net debt is almost down to nothing.
I think you are absolutely right in the way that you are looking at this issue for us. I think one, we are constantly looking at what we can do to step up investments in order to drive growth. Data centers is clearly a play that we want to be large on. Obviously, we will be keen to look at where there are opportunities to consolidate a fragmented industry. It’s got to be at the right value, it’s got to be done with the right kind of partner. So that’s something that we will certainly look at on the cloud.
We’ve already made a reasonable investment and we are committed to dramatically stepping up investments if needed. And this is an area that we are again doubling down on. There’s a lot of work that’s going on on just the product capability. There are over 160 features that really require that you need on the cloud for you to be a very good competitive cloud. We built most of those features. We’re also looking for certification with METI on the, on, on, on being constituted as a sovereign cloud. We think the geopolitical, you know, implications that are playing out across the world will lead to more and more need for data to be hosted in India with the right jurisdiction.
There’s an opportunity for strong sovereign play here and, you know, from our perspective, we will do what we need to to make the investment. So that’s the second area where we look at, and we’re also looking to see whether there could be opportunities to, you know, add to the portfolio within the B2B space. Again, we’ve been, we’ve been looking around for the last couple of years. We haven’t found anything interesting or exciting and that is something that we’ll continue to look at. So all of those opportunities will be looked at in addition, of course, to the core business getting its due share of investments.
Pranav Kshatriya
So just a follow up here. Can we expect leverage to come back to two times once we see opportunities over next two to three years that may not happen and in that case you might want to return the capital.
Gopal Vittal
I think that we are not at that point at this stage to do this. I think we think that there is still a lot of growth in this market and that’s the place that we are really going to be focused on right now.
Pranav Kshatriya
Okay, thank you. That’s it from my side. Thank you so much.
operator
The next question comes from Mr. Arun Prasad. Mr. Prasad, you may please unmute your side, introduce yourself and ask your question now.
Arun Prasath
Good evening. Thanks for the opportunity. My first question is on the five gfwa. Gopal and Sashad, can you qualify? What is our churn rate in FWA 5 GFW so far? Is it closer to the wireless or is it closer to the wireline? And also, we have also spoke about, you know, eventually the upgrading the five GFW homes to the connected wired homes. Is there any progress on that front? That is my first question.
Gopal Vittal
I think we, you know, we don’t disclose the churn by this. I think the churn that we look at is, is an overall churn. Obviously we de average this and we look at it in a granular way and see where the opportunities are. I think in the past, as we started with fwa, we did see modestly higher levels of churn because it was being put in the wrong places where we didn’t have the right experience. I think those problems are now getting behind us. Theoretically, you should actually see a much lower churn on fixed wireless access because there is no fiber, there’s no cut, there’s nothing.
I mean, once you put the radio up there, it should be working unless there’s a capacity problem at the radio end on the site. So that’s the theory. I think the thesis always is to actually shift fixed wireless access to fiber. That was really the original plan. In fact, a lot of our fiber planning that we do is a function of the total amount of smartphones in a specific polygon. We divide the country into a million micro markets. We look at the polygon and see where are the smartphones and where do we need to deploy fiber.
And of course, if you’ve got fixed wireless access, then clearly that becomes the first port of call to put in fiber. The only constraint that we will have to deal with as we make that shift from fixed wireless access to fiber is that in some cases, you may need to go back into the customer’s home for some wiring to be done. Because where you put the, the router for the customer, the terminal box for the customer may be slightly different from where the fixed virus access CPE is actually deployed. So that’s the only thing that we will need to sort of deal with.
But we are not at that stage right now. I think that if we find the right proposition, I have no doubt that we’ll be able to translate and move some of those fixed wireless access customers to fiber, because our strategy is to actually then take that same fixed wireless access and then deploy it elsewhere. But we’re not at that stage right now. Right now it’s still very much a land grab phase.
Arun Prasath
That doesn’t mean our network requirements because we are still largely dependent on FWA. And as this FWA’s customer base scales up, do we see a scenario where we need to step up say investment in infill towers or additional spectrum to service these FWA customers?
Gopal Vittal
No, we’re not at that stage at all. I mean the amount of headroom for supply is very high. And don’t forget we are rolling out 2 million home passes a quarter. So fiber home passes a quarter. So we are really stepped up on our fiber home passes every quarter and we are trying to see can we do more of this. And at one day today the total number of broadband homes are about 45, 46 million. One day, not in the very distant future, could be about maybe four years or five years. This will be 100 million.
And our effort is, you know, to try and get fiber into every nook and corner this 100 million homes so that increasingly you have more fiber because that’s the best way to deliver home broadband.
Arun Prasath
Upon my second question, just one like once again on the capital allocation capex, you see we are on track to most generate 50,000 crores of free cash flow from India business. This after considering our normal capex across wireless, wireline and enterprise. And even if we consider the data center scaling up some current 150megawatt to 1 gigawatt hour, it’s still equivalent to one year of our free cash flow. So question is, are we running out of avenues to invest these kind of a huge cash flows every year? The problem typically faced by the telcos in the developed markets, are we getting into that zone? Can we step up our investment profitably in other different areas?
Gopal Vittal
Yeah, it’s a good question. I think it’s a good problem to have. Like I said, I think there are three ports of call right now. One is data center, the second is cloud and the third is opportunities and financial services. And this is one of the reasons that we have put in place a succession where Shashwat runs the India business. And I have a little more time to actually look at some of these areas and really the deployment of this for growth. So this is an area that we will certainly be, you know, continuing to look at.
But it’s a good problem to have.
Arun Prasath
Right. So that means more inorganic kind of opportunities.
Gopal Vittal
I don’t have an answer to your question right now.
Arun Prasath
Okay.
Gopal Vittal
Other than the things that you’re already. Clear about
Arun Prasath
okay, all the best for getting that. Thank. You.
operator
Thank you everyone. I would now like to remind the participants to stay connected on the call for the next session on Bharti Hexacom. With this I would like to pass over to Shashwat for his closing remarks for Bharti Airtel.
Shashwat Sharma
Thanks Adi. I want to thank everyone on the call for joining the earnings call. I think it was a very, very interactive and positive questions, very interactive session. Thank you all and I’ll see you next quarter. See you.
operator
Thank you Shashwat. With this I would now like to pass over the call to Mr. Swamin Ray for his opening remarks on Bharti Hexacom performance.
Soumen Ray
Thank you Vidhi and good afternoon everyone. Welcome to the Bharti Hexacom Q3FY26 earnings call. I have with me Karthik and Naval joining on the call. We delivered yet another quarter of consistent performance with revenue of about 2,360 crores growing about 1.8% sequentially. Ebital for the quarter came in at over 1120 crores with a margin of 47.6%. We ended the quarter with a mobile customer base of 28.4 million. Net customer addition for the quarter came in at about 370,000. Smartphone customer additions were strong at 283,000. ARPU for the quarter was at 253. Driven by our focus on quality customers and portfolio premiumization, our homes business is seeing robust growth acceleration with a record high net adds of 73,000 driving revenue growth to over 10% sequentially.
FWA expansion to newer PIN codes and continued deepening of our FTTH footprint is driving this growth for us. We have launched IPTP services in Rajasthan and Northeast which will amplify and align with our convergence strategy. Operating free cash generation which is EBITDAL minus CAPEX was a strong 784 crores. Our balance sheet is robust with a net debt excluding leases at about 2,160 crores and a net debt to EBITDA below 1. With that I hand over to Vedi to open the floor for questions.
operator
Thank you. Souman. With this, the first question comes from Mr. Vivekanand Subaraman. Mr. Subaraman, you may please unmute your side, introduce yourself and ask your question now.
Vivekanand Subbaraman
Hi, I’m Vivekanand Subaraman from Ambit Capital. My first question is on the operating leverage that you have in your business model. So if I look at let’s say one more round of tariff repair which could happen say sometime this year or the year after, how do we think about the operating leverage from an incremental EBITDA flow through to the to the new revenue that comes from the tariff repair? That is question one. The second one is your balance sheet is even more conservative compared to Bharti Airtel. So how do we think about the capital structure and capital reinvestment opportunities, let’s say for fiscal 27 and beyond as well? Thank you.
Soumen Ray
Thank you. Vivekananda. On the first question, which is around operating leverage, there have been past tariff increases. Unfortunately in this industry we have tariff increases which happens after long durations. Of course our output continues to grow through the various tools that we have like premiumization interventions, upgrades and so on and so forth. However, there is also a cost which happens due to inflation, part of which is negated by our War on West initiatives. So I think you should look at it not as a point in time but as a trailing thing wherein costs will keep growing and we will try to optimize on how we can increase our ARPU to minimize that impact of cost increase.
And when tariff comes, tariff comes on a big bang way on a certain day. So on that day, yes, there is a flow through. However, we must also remember in the last two tariff repairs we have seen market consolidation and so on and so forth. So there will be those things and some of those consolidations come back. There is continuity impact. So I don’t think the answer is so simple that if you take a 10% tariff repair, 10% of your revenue minus license fee will flow to EBITDA. Part of it will go to negate the cost creep.
Part of it would also be impacted through customer base adjustment and continuity and so on and so forth. But yes, if you were to ask me cetris peribus on the day, if a customer recharges at a higher tariff, does that flow? Yes, it flows because there is nothing else in terms of cost that has gone up on that date except for variable cost, which is essentially a bit of selling and distribution and license fees. On your second question, yes, it is a pretty robust balance sheet and I’m sure that the board will look at it and evaluate as to what is the best way to deploy.
Remember, we had just started the journey on homes and both these two places. I think there is a huge play for FWA. Both are difficult terrains. Fiberisation is a challenge. 5G handset penetration is increasing and my 5G coverage will also keep increasing. So FWA becomes a very viable solution and hence you may see, driven primarily by the Home’s FWA led WI fi penetration in these two circles asking for bigger capex. But your point is absolutely valid. I’m sure the board will look at it in the light of what can be done with the solid balance sheet that is there.
Thank you.
Vivekanand Subbaraman
Thank you. Soman. Just one follow up. The absolute capex has been falling since FY24. And now when I look at the reinvestment in homes and 5G coverage expansion, what is the guidance or direction that you believe CapEx should take for FY27? If you have formulated your plans, it would be great for us to understand the details of that.
Soumen Ray
So Vivekanand, of course I cannot share with you what is my capex guidance because as a rule we don’t give guidance. But let me put it in this way. This is a company which has a very strong balance sheet and will not shy away from putting investment where growth is required. So if I were to answer you. If we find let’s say a new urban periphery coming up in one of the cities in any of these, we will immediately put up sites over there. If it is reasonably decently penetrated with 5G phones, we’ll put 5G radio.
Home penetration. As I said, we have got very good results. I think sequentially 10% growth. The base is small I admit, but sequential quarter on quarter, 10% growth. Our ambition will be to grow. So I would flip the answer in a way that since the balance sheet is strong it allows the company to drive growth even faster as opposed to a constraint balance sheet. So as far as guidance is concerned. I’m sorry Vivekananda, we don’t share any guidance as such.
Vivekanand Subbaraman
All right Shamin. Thank you and all the very best.
Soumen Ray
Thank you.
operator
The next question comes from Mr. Sanjesh Jain. Mr. Jain, you may please unmute your side, introduce yourself and ask your question now.
Sanjesh Jain
This is Sanjay from ICICI securities. First question on the revenue growth. If I look at our mobile revenue growth versus Bar theaters mobile revenue growth we have underperformed. Now this is the second quarter of underperformance. I thought second half is stronger for Exacom because of tourism in the Rajasthan circle. While the underperformance on the sequential revenue growth very much stays. Any any particular reason you are seeing you’re going slower than Airtel or why Airtel is growing faster than us which is in a way is perplexing. I thought this is underpinning circle. We have lot more to catch up on.
5G 4G versus Power Theater. But clearly the underperformance is Something which if we can help us in reconciling, that will be very, very useful.
Soumen Ray
Thanks. Anjesh, you would recollect that in the last quarter we had called out that there were some issues because of which we had some customer drop. While we are very closely with other partners to see that it gets resolved, it has not yet got resolved completely and hence there is a bit of drag which we still have on that. Now your interpretation is absolutely right that during winters, certainly Rajasthan, I do not know so much about northeast, but certainly Rajasthan is a destination where there are a lot of national enromers and that thereby it generates revenue.
I haven’t checked with other, let’s say somebody like Travel Portal or anybody. But I think, let me put it this way, Sanjesh. We are focused on how do we do the people who are in the state in these two circles. How do we improve their ARPU and their penetration. And over there we have a challenge. As I mentioned last quarter, the challenge started, the challenge is not yet solved. But there is absolute alignment between the two partners. To solve it in Romas is something which is beyond our control. It is based on whether people want to go to deserts or to mountains.
But I can tell you underlying growth, give or take, you know, 20, 30 basis points here or there. BHL is trending with the national average and you will see results coming in 1/4 Aberration and primarily because of this interference is what is coloring the picture.
Sanjesh Jain
No, that’s. That’s clear. Shamit, just one question on the FWA. What is an opportunity size? Gopal mentioned 100 million for pan India. But if I want to narrow it down to us, what is an opportunity size? We are looking in FWA for Hexacom circles.
Soumen Ray
Well, Sangesh, you know certain data sets basis which we size out the market, which is a statistical model data is not available on a state cut level. So I can hazard a guess. But I would say if you look at India, the number of households is about give or take anywhere between 250 to 300 million. And we are talking of in five years India going to 100 million. So assuming it is 250 million households, that’s a 40% penetration. Whatever household is there in these two states, we can assume that the penetration will of course be lower because this is a national average.
These two states have a challenge which is why directionally their mobile ARPU is also lower. Would be a shade below that. As you know, there is a lot of combined strategy which is used and which is helping this company to Great deal because otherwise running two circles, we could not run the heft. So strategies are allowing basis national but I would hazard a guess anywhere between 30 to 35% penetration of households should be something which we can easily aspire to.
Sanjesh Jain
No, that’s clear. One last bit from myself on the. On the capex and the new business, apart from FW and mobility, are there any plan for Hexacom or. It will be all done through the Airtel side.
Soumen Ray
See, we of course have small and medium business which happens through Hexacom. But as you know in these two states we don’t have large enterprises. And as was mentioned in the previous call, bulk of the market is restricted to the top 500 companies and none of them have their head office in either of these two states. So B2B clearly is not an option there. The other option is Data center which is an independent company. Nextra does it and nexta will do it anywhere in India. And again, Digital TV of course, as we mentioned, IPTV has been launched and you will see strong growth in that because we are evidencing very strong affinity for a converged home strategy.
Our interface is best in class. So adoption rates are very, very strong. I’m not in a position to share them because within the quarters and all of that, but adoption rates are very strong and we expect that digital TV will also be something which will work well in these two places.
Sanjesh Jain
No, that’s great. Thanks Shomin for all those answers and best of luck for the coming quarters.
Soumen Ray
Thank you. Sanjeev.
operator
The next question comes from Mr. Gaurav Malhotra. Mr. Malhotra, you may please unmute your side, introduce yourself and ask your question now.
Gaurav Malhotra
Yeah, hi, this is Gaurav from Access Capital. Swami, just couple of questions. You know if I see the bump up in homescapex for Hexacom versus Airtel. Right. Obviously there’s a, there’s a big increase for both, but Hexacom is especially quite high. I think it’s more than 100%. This, the first nine months is like I think 400 of your last of FY27 while for Airtel I think it’s like 56, 60% or some such number. It’s. It’s both a large but. But this is, this is larger. So given that, you know here it’s more fwa. While in, in Airtel they would also be fiber Capex. I just wanted to get some sense as to why there is a larger spike in home Capex in Hexacomp versus Airtel.
Soumen Ray
So you see Any spike is a function of the base. And the very thing that you said and I explained that fiber density in these two circles is lower which is why our homes business was also lower. If you look at pre FWA and you look at share of homes business on total top line or homes as a percentage of mobile in Airtel versus Hexacomp, Hexacom was minuscule. Hexagon was, I don’t, I don’t remember but it was 1 or 2% whereas for Airtel it was a good 4, 5% or 4%. So the point that I’m trying to come to it to you is that the, the base was very low and FWA has done the expansion much more and hence because of the small base you see a increase which is disproportionate in percentage terms compared to what you see in Airtel.
There is no other reason than that. I mean it’s a direct function of how many customers we acquire and how much stock we carry. That’s the capex. So there is nothing more to that.
Gaurav Malhotra
Just to follow up on what you mentioned, you giving some numbers on Airtel and Hexacom from a potential FW penetration of broadband penetration using 250 million and 100 million, so around 40%. So 250 million is the addressable home. Is that is that
Soumen Ray
India has 1400 million people and roughly if you take 4 to 5, that number is anywhere between 250 million homes to 300 million homes. That’s the number of homes which is there in India. Also you can also evaluate and this is just they’ve got nothing to do with Hexacom. You can also look at number of TV homes between cable, satellite and fta. You will come to a number which will be closer to about 200 million. So give or take, you know, that is how the industry and the country is divided. So because as I explained, we do not get enough data sets by geographical cuts to do some of our hypothesis.
But the data sets are very robust at a country level. So our ability to forecast what could be the size of the market at a country level is much easier. But we can use the same parameters with a discount factor on affordability, disposable income and come to a number.
Gaurav Malhotra
This last question in the Airtel call Shashwat had mentioned about the fiber 5G, FWN and UPR. And obviously we understand the issues with or challenges with upr. But would Hexacom be more open to using UBR given the likelihood of interference in these two circles will be less say than Average pan India level.
Soumen Ray
So I will give you two answers Gauravar Answer 1. As an organization we want to give home WI fi. Now there are multiple technologies by which you can give home WI fi. According to us the gold standard is if you give a fiber because that gives you the most consistent delivery and lowest latency. There are two others. The next best is FWD and the least best is UBR because of interference as you mentioned we will try everything to deliver and increase our addressable market. So this will be no different. We have to just work out as to where is the demand coming from and is that wherever that demand is coming from is that a well to do area with a good 5G penetration as in handset penetration? If it is there then we don’t need to think about udl.
We can put FWA and serve that customer. So this is a unique set where we don’t want to put a SWA ratio because the affordability is not there and it answer is not there. But there are a lot of people who want home WI fi. So there again UBI will go but our sequence of preference is that so.
Gaurav Malhotra
Is there is this some sort of a nuance change versus what was the thought process till sometime back wherein UBR was like maybe you were like more negative, not negative. Maybe you were less enthused on UBR say till few quarters back then what you are today the right way of thinking about it.
Soumen Ray
No, no Gaurav, absolutely not. As a matter of fact technology cannot drive product. Consumer demand should drive product and thereby technology. Now if, let’s assume 95, 97% of my demand is coming from places where I can service through fiber and fwa. I don’t need you here. That’s why I told you this is a place where there is not enough 5G handset penetration. But people are asking, people are ready to pay 400, 500 rupees per month plus taxes to get a broadband connection, a home WI FI connection. If that happens we’ll deploy. There is no debate around that.
So there is no rethinking. That’s what I’m saying. Technology is not good or technology is not bad. The question is there’s a customer demand and for that customer demand I need a product. Now whatever technology allows me to offer that product I will do. And the reason why we are still evaluating is we don’t want to offer a product but the customer says I have a need but I have a very bad experience. We don’t want to end up in that scenario. Scenarios which is why we want a product which meets a customer need and consistently gives more than acceptable customer experience.
Gopal Vittal
Understood. Thank you so much.
operator
Thank you everyone. Now I’d like to pass over to Souman to give his closing remarks for Bharti Hexacloud.
Soumen Ray
Thanks a lot for joining the call. Very interesting questions and very relevant ones. Look forward to speaking to all of you next quarter. Thank you.
operator
Thank you everyone for joining today. The recording of this webinar will be available on the company website. Have a great day ahead everyone. Bye. Goodbye.