Key highlights from Bharti Airtel Ltd (BHARTIARTL) Q4 FY22 Earnings Concall
Management Update:
- BHARTIARTL said that its innovation through the digital local cable operator partnership model has added 175 new cities in Q4. BHARTIARTL expects this category to grow to over 40 million homes by 2025, and added that it’s well poised to gain a very significant share of this growth.
- BHARTIARTL said its ARPU is now at INR178, which is a strong move towards its first goal post of INR200, and the eventual target of INR300 ARPU.
Q&A Highlights:
- Manish Adukia from Goldman Sachs asked about the wireless capex being down for last couple of quarters and if the reduction is likely to sustain. Gopal Vittal MD said that on wireless capex, looking at aggregate company capex, it’s broadly trending to about INR20,000-21,000 crores, last year. BHARTIARTL doesn’t expect any significant change from that number.
- Kunal Vora of BNP Paribas enquired about the interval between two tariff hike. Gopal Vittal MD replied that BHARTIARTL should start seeing some tariff increases during the course of this year, but cannot give the exact timing of it.
- Kunal Vora of BNP Paribas also asked about the industry growth excluding the price hike. Gopal Vittal MD said that it needs to be seen how it plays out. Upgradation from feature phone is one factor. The second factor is the growth of postpaid, which is expected to grow. And thirdly, the growth of broadband in home segment.
- Kunal Vora of BNP Paribas enquired about site addition of 7,000 in 4Q. Gopal Vittal MD said that while the company has a significant stake in Indus, it works with all the tower companies. BHARTIARTL also added that the market shares that it has added don’t seem to vary significantly over prior periods as far as site additions.
- Kunal Vora of BNP Paribas asked about network opex. Gopal Vittal MD replied that the company is running a strong program on War on Waste, where it is working with the tower company to drive down energy costs, as well as rental cost at every tower. However added that in recent weeks a serious headwind has been rising energy prices.
- Sanjesh Jain with ICICI Securities enquired about the reason for strong growth in enterprise business. Gopal Vittal MD clarified that its B2B business is a real jewel in BHARTIARTL’s portfolio. And the team there has done a really awesome job.
- Sanjesh Jain with ICICI Securities asked if the current debt reduction on a net debt basis, adjusted for the dividend payout, is a possible thing from FY23. Gopal Vittal MD answered that it’s subject to no other unknowns coming in the picture. One of the things to expect to happen in the next few months is the 5G auctions.
- Pranav Kshatriya of Edelweiss Financial Services asked about the churn in the business if it’s trended upwards or downwards. Gopal Vittal MD replied that it’s not trended upwards or downwards. It’s rock steady and very low at sub 1%.
- Vivekanand Subbaraman asked about the capex increasingly directed towards non-mobile businesses and what will be the priorities and the growth trajectory going forward. Gopal Vittal MD said that looking at the next 5 years, BHARTIARTL would simply say that the contribution of the non-mobility side to the overall portfolio has to get larger and larger.