Bharti Airtel Ltd., a leading telecom company with operations in 20 countries across Asia and Africa, in its Q3 earnings call highlighted plans to reduce India capex, particularly in transport and home broadband, with moderation expected in FY2026. The company will utilize free cash flow for deleveraging, dividends, and selective investments, while forming a strategic partnership with Bajaj Finance for Airtel Finance. Company mentioned that ARPU growth is anticipated through subscriber mix improvements, with the 2GB unlimited data plan driving 5G adoption. Despite margin dilution in B2B due to converged hardware solutions, the commodity voice business decisions won’t impact Airtel IQ or CPaaS. Bharti Hexacom’s efficiency drive includes tower transfer to Indus, while the postpaid segment shows growth potential despite price compression.
Bharti Airtel delivered remarkable Q3 financial results, with consolidated net profit surging 505% year-over-year, primarily driven by exceptional gains of INR7,545 crore from the Indus Towers consolidation. Excluding this one-time gain, adjusted profits grew 121% to INR5,514 crore, supported by June 2024 tariff hikes and customer upgrades. Revenue increased 19%, with India business growing 24.6% and Africa operations expanding 21.3% in constant currency. The company’s EBITDA rose 24.1% with margins reaching 55.1%. Operational metrics showed strong improvement across segments, with ARPU increasing to INR245, postpaid customers growing by 0.6 million to 25.3 million, and 6.5 million new smartphone users added during the quarter. Infrastructure expansion included 5,200 new towers and 16,300 mobile broadband stations. Airtel’s global customer base reached 576 million (413 million in India, 163 million in Africa). Additionally, Indus Towers announced the acquisition of 16,100 towers from Bharti Airtel and Bharti Hexacom for INR3,308.7 crore.
Continue Reading: Discover the Vital Insights from Bharti Airtel Ltd.’s Earnings Call!
Financial/Operational Metrics:
- Total Revenue: INR45,129 crore, up 19% YoY.
- Net Profit: INR14,781 crore, up 505% YoY.
- EPS: INR25.95, up 505% YoY.
- EBITDA: INR24,880 crore, up 24% YoY.
- Total Expense: INR20,532 crore, up 13.5% YoY.
Outlook:
- Cloud Business: Preparing to launch a comprehensive cloud solution in the coming months.
- Broadband Market Potential: Estimated to double from 45 million to 80-90 million homes.
Analyst Crossfire:
- Capex Reduction & Future Allocation (Manish Adukia – Goldman Sachs)? It was outlined that capex has moderated for the India business, with significant deceleration in radio investments. Company expects this trend to continue into FY2026, focusing future investments on transport, homes, B2B, and data centers to align with global peers in terms of capex as a percentage of revenue (Gopal Vittal – MD).
- Mobile ARPU Growth & 5G SA Network for FWA (Piyush Choudhary – HSBC)? ARPU growth can continue through subscriber mix improvement without tariff hikes. He also discussed the readiness to switch to 5G SA for Fixed Wireless Access (FWA) when capacity requires, though currently, NSA suffices (Gopal Vittal – MD).
- FWA vs. Fiber Economics & Margins, Data Center and AI Investment Strategy (Sachin Salgaonkar – BofA)? FWA and fiber have similar economic models and EBITDA margins, with FWA being deployed where fiber isn’t available, especially in less densely populated areas. Company mentioned ongoing evaluations for data center expansion, particularly in light of AI developments, but stated no immediate action or announcements were forthcoming (Gopal Vittal – MD).
- 5G Customer Behavior & Data Monetization, Capex Normalization Post 5G Rollout (Sanjesh Jain – ICICI Securities)? It was confirmed that 5G users are consuming more data, contributing to data monetization through higher data pack upgrades, driven by unlimited data offerings. Company is foreseeing a significant reduction in capex as the major 5G rollout phases out, focusing on selective expansions (Gopal Vittal – MD).
- Enterprise Revenue & EBITDA Trajectory, B2B EBITDA Decline (Vivekanand Subbaraman – Ambit)? The decision to reduce focus on the commodity voice business would not impact Airtel IQ or CPaaS, and any EBITDA impact would only be visible from February. The decline in B2B EBITDA was due to a shift towards selling converged solutions with hardware, which dilute margins but are fast-growing (Gopal Vittal – MD, Soumen Ray – CFO).
- Postpaid Opportunity, Capex Guidance with FWA Scale-up (Aditya Suresh – Macquarie, Vivekanand Subbaraman – Ambit)? The company highlighted significant opportunity in postpaid, noting that there’s a potential base of 80 million credit-worthy customers and discussed the pricing dynamics between prepaid and postpaid services. It was noted that there could be a marginal increase in capex due to FWA rollout, but overall, the direction would remain similar (Gopal Vittal – MD, Soumen Ray – CFO).
