Bharti Airtel Ltd Q2 FY23 Earnings Conference Call Insights

Key highlights from Bharti Airtel Ltd (BHARTIARTL) Q2 FY23 Earnings Concall

Q&A Highlights:

• [00:20:36] Manish Adukia of Goldman Sachs asked if the increase in market share and tariff correction can go hand in hand for the company. Gopal Vittal CEO said its wish is that tariff repair happens sooner as there is a massive investment happening. Also India’s pricing structure is the lowest in the world and BHARTIARTL believes that 8.5% ROC is very low.

• [00:22:49] Piyush Choudhary with HSBC asked about subscriber trends of tepid growth for the last 1 year for the company and if it would remain the same. Gopal Vittal CEO said that the company has seen pressure on semiconductor prices that has pushed smartphone prices. So there’s been some improvement in 4G upgrades, but not big.

• [00:23:13] Piyush Choudhary with HSBC also asked about the key challenges to the business and steps taken to mitigate that. Gopal Vittal CEO answered that the big risks are of supplies of equipment and talent. Attrition post pandemic has been higher. And to counter this, the company is providing the culture of ownership.

• [00:26:52] Sanjesh Jain from ICICI Securities enquired about driver of strong 3.6% ARPU growth. Gopal Vittal CEO replied that the reason for growth is that the company is now applying a more sophisticated understanding of which customer to really go after. Second is upgradation from feature to smartphone. And third is premiumization from prepaid to postpaid.

• [00:27:36] Sanjesh Jain from ICICI Securities asked about digital revenue of INR960 crore, doubling sequentially and how much is from enterprise and consumer. Gopal Vittal CEO said the company has three streams of digital revenue. One is marketplace revenue, advertising revenue and Airtel IQ. However, Airtel said individual contributions cannot be disclosed.

• [00:32:34] Subhradeep Mitra of UTI Mutual asked about the expected level of tower addition given the rollout of 5G pan India. Gopal Vittal CEO answered that the existing 5G technology is going on with existing towers. The company said it’s unlikely that in the next 2-3 years it will be building more size for 5G. In rural, the company is looking at reducing dependence on diesel and go for lean sites at lower cost.

• [00:36:35] Kunal Vora with BNP Paribas asked about elevated churn of 3.3% monthly and when the company is seeing it stabilizing. Gopal Vittal CEO replied that the elevated churn is due to less churn of tenured customers and poor quality of customer acquisition. The company expects it to stabilize in the coming months.

• [00:42:29] Vivekanand S. from Ambit Capital also asked about the substantial headcount addition done in last 9 months. Soumen Ray CFO answered that in the SME segment it has channel partners which needs to be looked at in a more standardized and elevated manner. Consequently, the company has insourced more than 1,000 people of that account who were earlier off-rolls.

• [00:53:02] Nicholas of Macquarie asked about the time period when the company sees peak capex. Gopal Vittal CEO replied that it’s a highly modular business and the company will wait and watch how it plays out to determine the ultimate level of capex for the following year.

• [00:54:22] Nicholas of Macquarie enquired if the company has decided on the pricing and sale of 5G. Gopal Vittal CEO clarified that the plans being offered are the same for both 4G and 5G. If one has got a 5G device the data will work on 5G.