Airtel net profit surges 86%, Arpu at industry high of ₹190

Net profit rose to ₹2,145 crore for the September quarter from ₹1,134 crore in the year-ago period. Profit rose 33% sequentially from ₹1,607 crore in the June quarter.

Revenue, however, beat analysts’ estimates, rising over 22% to ₹34,526 crore, boosted by 4G customer additions. Sequentially, revenue rose 5.2% from ₹32,804 crore.

India’s No. 2 carrier called for another round of tariff increases to drive the 5G rollout and digital adoption. However, it also cautioned against low return on the capital employed (ROCE) metrics for the industry owing to low pricing.

Airtel was the first telecom operator in India to roll out 5G services, starting with eight cities, including the metros. It plans to cover all urban and key rural areas by March 2024.

“I do believe that 5G technology has the potential of bringing tremendous innovation to India. At the same time, we remain concerned about the low ROCE that our business delivers due to pricing that is the lowest in the world. Given the large investments required to drive digital adoption in India, we believe there is a need for tariff correction,” said Gopal Vittal, managing director and chief executive of Bharti Airtel.

Carriers increased prepaid tariffs by 20-25% last November, stating that the existing tariffs were too low and were hurting profits due to low ARPUs. They said ARPUs must rise to ₹200 per month in the near term and to ₹300 in the long run.

The Sunil Bharti Mittal-promoted telco’s average revenue per user—a key measure of profitability—was ₹190 for the quarter, more than market leader Reliance Jio and higher than estimates suggested by analysts. ARPU was 23.7% more than ₹153 in the year-ago quarter and 3.8% more than ₹183 in the June quarter, primarily due to adding quality customers and upgradation of feature phone users to smartphones.

With over 363.8 million customers, of which 63% were using 4G, Airtel saw its earnings before interest, tax, depreciation and amortization rise 26% from the year ago to ₹17,721 crore, with margins expanding 1.8 percentage points to 51.3% in the September quarter.

Revenue from its India business rose 22% from the year ago to ₹24,333 crore. Its mobile revenue rose 25% to ₹18,957 crore from ₹15,191 crore in the corresponding quarter of last year, led by 4G customer additions and an increase in its ARPU.

“We have delivered yet another quarter with competitive revenue growth and improved margins. Our consolidated revenue grew sequentially by 5.3%, and EBITDA margin expanded to 51.3%. The consistency of our execution is driven by the strength and resilience of our portfolio. Our B2B and homes business continued their strong growth momentum and mobile ARPU expanded to 190 on the back of premiumization and deep customer understanding,” Vittal said.

Airtel added 17.8 million 4G customers to its network in the past year, up 9.2% from the year ago, while average data usage per mobile data customer rose to 20.3 GB per month and voice usage per customer stood at 1,082 minutes per month.

Airtel added 8,000 towers during the quarter. Voice-over Wi-Fi adoption was scaled to improve the customer’s indoor experience. “We now have 47 million customers using our Vo-Wi-Fi services.”