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Informist, Wednesday, Aug. 6, 2025

 

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--Bharti Airtel: Q1 revenue impacted by decline in revenue in B2B segment
--CONTEXT:Bharti Airtel management's comments in post-earnings investor call
--Bharti Airtel:B2B segment revenue decline Q1 in-line with earlier guidance
--Bharti Airtel: Accelerating rollout of fibre home passes
--Bharti Airtel: Stepping up investments in core connectivity in B2B segment
--Bharti Airtel: Wireless capex trending down but capex in fibre continuing
--Bharti Airtel:Margins very good in connectivity segment in Airtel Business
--Bharti Airtel: Not fussed about not winning on fixed wireless access share
--Bharti Airtel: Want to win the WiFi game using both fibre, fixed wireless
--Bharti Airtel: Cloud svcs arm Xtelify not set up to unlock value later
--Bharti Airtel: Cloud svcs arm Xtelify ops to be anchored to Airtel

 

By Rajesh Gajra

 

NEW DELHI – Bharti Airtel Ltd. has stepped up investment in its business-to-business segment in core connectivity and other parts to drive growth, the management said in a post-earnings call with investors and analysts Wednesday. The management said the company has made substantial investments in optical ground wire capacities connecting all metropolitan areas and major cities.

 

There was a significant investment made nine months ago to connect data centres and cable-landing stations in Mumbai and Chennai, it said. The business-to-business segment called Airtel Business recorded a decline of nearly 5% on quarter to INR 50.57 billion in the June quarter. This impacted the consolidated revenue performance of the company during the quarter, according to the management, but was in line with earlier guidance on exiting low-margin businesses in the segment. Bharti Airtel's consolidated revenue for the June quarter rose 3.3% on quarter to INR 494.63 billion.

 

Bharti Airtel Vice-Chairman and Managing Director Gopal Vittal told participants on the call that in the business-to-business segment the company's "infrastructure, comprising low-latency fibre, submarine cables, OPGW (optical ground wire) fibre, and advanced data centres, is the backbone of our superior service quality assurance". The bulk of the current incremental growth for the industry in business-to-business is happening in adjacencies, cybersecurity, internet of things, and cloud services, he said. In each of these areas the company continues to invest and see interaction, with the digital segment now growing at 23%, the company vice-chairman said.

 

Bharti Airtel had announced Monday that its fully-owned subsidiary Xtelify, which houses all of Airtel's digital assets and capabilities, launched a new sovereign, telecommunications company-grade cloud platform Airtel Cloud that offers "IaaS (infrastructure as a service), PaaS (platform as a service), and advanced connectivity and guarantees secure migration, effortless scaling, lower costs, and no vendor lock-ins."

 

To a question whether Xtelify will be among the assets whose value will get unlocked through a stock exchange listing in the next 3-5 years, the Bharti Airtel management said Xtelify "has been set up as a separate subsidiary not with an intention to unlock value but really with an intention to provide focus and provide credibility in the marketplace". The anchor customer for Xtelify is Airtel India, the management said.

 

Vittal said the connectivity segment has historically been the bread and butter for the business-to-business segment and delivers very good margins which are better than the overall margin for the segment "because this is what we manufacture ourselves".

 

In the home broadband business, the management said the company is accelerating the rollout of fibre home passes to increase penetration and seize the large opportunity that exists in the market. The focus is on deepening the company's network and market footprint, it said.

 

As on Jun. 30, Bharti Airtel's home services segment covered 1,512 cities in India, with 36 cities added during the June quarter. The segment had 10.98 million customers in India at the end of the June quarter with 939,000 customers added during the quarter. The management said the company wants to substantially increase the quarterly run rate of home passes.

 

In the India wireless business, the capital expenditure has been trending down, the management said in response to a question by an analyst. But investments are continuing in fibre expansion on the company's core networks "because that is linked to our quest to connect more and more sites to fibre" and running the core networks based on the capacities and the bandwidth that get consumed, the management said.

 

To a question about increasing Bharti Airtel's share of fixed wireless access subscribers in the home broadband segment in the domestic telecom industry and the company's target for the same, the management said Bharti Airtel looks at the segment differently. The company looks at both fixed wireless and fibre-to-the-home businesses together and markets its offering as Wi-Fi. "We don't care whether the customer is on fibre or fixed wireless as long as he gets Wi-Fi... (but) we do care at the back that if we have got fibre (connectivity) in that particular place we want the customer to be on fibre because that is a better quality connectivity," the management said. The company, therefore, wants to win the Wi-Fi game and is not fussing about winning a larger share of fixed wireless access subscribers.

 

Bharti Airtel had announced its June quarter earnings Tuesday. Its consolidated net profit for the quarter declined 46% on quarter to INR 59.48 billion.

 

In a separate post-earnings call with investors, the management of Bharti Hexacom Ltd., a listed subsidiary of Bharti Airtel, said there was a reduction in its reported revenue due to the dropping roaming rate. Seasonality was also a factor, but "there were couple of unfortunate incidents which happened in Q1 (June quarter)", the management said.

 

Travel by customers came down in the beginning of the quarter and picked up later, the management said. The management was indirectly referring to the Apr-May incidents involving the terrorist attack at Pahalgam in Jammu and Kashmir and India's military response against Pakistan. Bharti Hexacom operates in Rajasthan and the northeastern states.

 

Bharti Hexacom also announced its June quarter earnings Tuesday. The company's net profit for the quarter fell 16% on quarter to INR 3.92 billion while the revenue from operations declined 1.1% to INR 22.63 billion.

 

Wednesday, shares of Bharti Airtel closed marginally down at INR 1,929.70 on the National Stock Exchange. Shares of Bharti Hexacom closed 2.8% lower at INR 1,795.20.  End

 

Edited by Rajeev Pai

 

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