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Informist, Thursday, May 14, 2026

 

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--Bharti Airtel: FY26 consol revenue marked lifetime high for co 
--CONTEXT: Comments by Bharti Airtel mgmt in post-earnings analyst concall 
--Bharti Airtel: Sharper focus on data centre, fincl svcs, cloud adjacencies 
--Bharti Airtel: Traction rising in cloud segment, in talks with new clients 
--Bharti Airtel: West Asia war impacted business on multiple fronts 
--Bharti Airtel: Determined to double down on all ARPU growth levers ahead 
--Bharti Airtel: See market scope of connecting 100 mln homes medium term 
--Bharti Airtel: See big growth opportunity in conversion to postpaid plans 
--Bharti Airtel:AI central to co's digital agenda, embedding in platform ops 
--Bharti Airtel: Cost pressure due to W Asia war confined to certain areas 
--Bharti Airtel: Seeing results from decline in diesel consumption at sites 
--Bharti Airtel: Aims to increase mkt share in data centre business 
--Bharti Airtel: Data centre market share at 10-12% currently 
--Bharti Airtel: Progressive dividend allocation to continue 
--Bharti Airtel: ARPU only set to go up in India 
--Bharti Airtel: Capex will continue to focus in core business in FY27 
--Bharti Airtel:Hope to bag additional returns from operating leverage ahead 
--Bharti Airtel: Hope to correct pricing architecture ahead to increase ARPU 
--Bharti Airtel: Real challenge in homes business to drive up penetration 
--Bharti Airtel Mittal:Wish to hand over reigns to next generation in 10 yrs 
--Bharti Airtel: Looking at small, controlled fincl svcs business currently 
--Bharti Airtel: To stay focused on fiber; fixed wireless expensive now 
--Bharti Hexacom: Will continue to progressively increase dividend payout 
--CONTEXT: Comments by Bharti Hexacom mgmt in post-earnings analyst concall 
--Bharti Hexacom: Will pivot to fiber opportunities wherever we can 
--Bharti Hexacom: No red flags on ARPU; headwinds similar to other peers 

 

By Shakshi Jain and Arya S. Biju

 

NEW DELHI – Bharti Airtel Ltd. is determined to double down on all levers to improve its average revenue per user, a critical metric for telecommunication companies to measure revenue efficiency, profitability, competitive performance, and growth. In this endeavour, an improvement in the pricing architecture comprises the biggest benefit, the company's management said in a post-earnings conference call with analysts Thursday.

 

"...the organic ARPU levers that we have, which we want to sweat much more, and especially led by a much bigger play in postpaid, as well as getting customers to their best fit plans, upgrading as much as possible within the tiers itself, driven by consumption, I think those levers still give us a good headroom for continuing ARPU growth for many quarters to come," Managing Director and Chief Executive Officer Shashwat Sharma said.

 

Sharma, however, added that recent rise in prices of smartphone handsets could not be ruled out as probable detriment to this growth, although no such impact has been observed so far.

 

Executive Vice-Chairman Gopal Vittal stressed that the telecom pricing architecture in India is fundamentally broken and needs to be repaired. "...Given the stratification in this country, from the very poor all the way to the very rich, the fact is that ARPU will only go up. So it's an unfortunate situation, like I've mentioned before, where the rich are paying less than they ought to and the poor are perhaps paying as much as they need to."

 

In the March quarter, the company's India mobile services average revenue per user rose 5% year-on-year but declined 0.6% sequentially to INR 257.  

 

The telecom major's consolidated revenue of INR 2.11 trillion for 2025-26 (Apr-Mar) marked a lifetime high for the company, as per the management.

 

In the initial remarks, the management said Bharti Airtel has sharpened its focus in three specific adjacencies, or new areas, namely data centres, Airtel Cloud, and financial services. In the data centre category, the company is determined to increase its market share, which stands at 10-12% currently, and build capacity of one gigawatt over the next few years. For the cloud business, the management said the category is seeing encouraging traction. "We ended the year with securing 24 deals, followed by further wins in April, and we are currently in conversation with multiple customers across industries."

 

In financial services, the company is eyeing a small and controlled business currently. The new venture may in fact require "significantly less" than the capex announced by the company for the next five years, Chairman Sunil Bharti Mittal said.

 

Earlier this year, the company had said non-banking financial services subsidiary Airtel Money Ltd. would be capitalised with INR 200 billion, to be injected over the next few years, with Bharti Airtel contributing 70% of the funding. This venture is now progressing towards a commercial launch, as per the management.

 

Among other areas of growth, the company sees a large opportunity in user upgrade to postpaid connections and is determined to speed up this growth by driving differentiation. In the homes services segment, the company sees a large opportunity with market potential of nearly 100 million connected homes over the medium term in India. "...we have doubled down on all our efforts to grow our fibre business. In FY26, we rolled out upwards of 8 million home passes to cross 45 million home passes, and we continue to expand rapidly," the management said. 

 

It added that with rising prices of telecom chipsets and memory components, fixed wireless access is set to become much costlier, which is why the company has pivoted to a dramatic focus on fibre connectivity. The real challenge in the homes segment is stepping up penetration, as per Vittal. "...long term, that will be a very significant mode for the company...this is a business that is very profitable over a period of time because the churn and the customer lifetime value of home tends to be very low," he said.

 

Artificial intelligence is now central to the company's digital agenda and is being embedded across the platform architecture. "AI is contributing to nearly 30% of all code written at Airtel and this number is growing with every passing week," the management said, adding that the company is still in the early stages of its journey on AI but is beginning to see meaningful impact scaling up across businesses.  

 

Overall, the company hopes to continue seeing operating leverage with growth in light of the heavy-lifting that has been carried out over the years. This should result in additional returns, the management said. On a separate note, it said it was beginning to see meaningful outcomes from initiatives to reduce dependency on diesel consumption across sites.

 

On the areas impacted by the ongoing war in West Asia, the management listed international roaming, capex on account of rupee depreciation, and restriction on gas supply hurting galvanisation in manufacturing of towers. The increase in energy prices has impacted operations in Africa, as per the management.

 

Cost pressures due to the military conflict remain confined to prices of servers and memory components as well as their availability. "Significant steps to re-engineer and redesign are underway in the organisation to mitigate these pressures," the management said.

 

CAPEX, PLANS AHEAD

Bharti Airtel will continue to focus the capital allocation towards the core business across India, Africa, and in that of subsidiary Indus Towers Ltd. "The second port of call is really to, you know, continue to de-leverage to the extent that we need to. But the third port of call is to invest in some of these adjacencies," Vittal said. He added that the free cash flow generation by the company has increased and the strategy of progressive dividend payout will continue.

 

On the share swap deal announced on Wednesday, Chairman Mittal said the belief remains that everything should be routed through one company, which should be the controlling promoting shareholder. "My own wish is that...in the next decade, as I kind of come to a point where I hand over the reigns to the next generation as shareholders, Bharti Telecom should get back to a controlling shareholding of 51%, or just over 50%. So, there's 10% more to go..."

 

Mittal was re-appointed as chairman of Bharti Airtel for a further term of five years on Wednesday, effective Oct. 1, subject to shareholder approval. The company's board also approved an increase in shareholding in Airtel Africa Plc. through a share-swap deal. As part of the deal, Bharti Airtel will issue shares worth INR 282 billion to promoter group company Indian Continent Investment Ltd. to get 16.31% stake in Airtel Africa.

 

Later in the call, answering a query on challenges to subsidiary Bharti Hexacom Ltd.'s average revenue per user, a company executive said that there are no red flags on ARPU growth as such and the headwinds they have are similar to its peers in the region. Further, on the subsidiary's home services business segment, the management said its objective is to continue growth, despite it being a competitive market. "The competition part always exists," the management added. During the March quarter, sales from the company's home, office, and other services segment rose 65% on year, driven by the addition of 395,000 customers.

 

As with the parent company, Bharati Hexacom will also focus on pivoting to fibre connectivity amid the rising chip and memory component prices. "If the fibre is available, we would like to grow fibre first and also try to see how much we can lay fibre," a company executive said. Bharti Hexacom provides consumer mobile, fixed line telephone, and broadband services in Rajasthan and the northeastern states of Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Arunachal Pradesh. The company also highlighted that it will continue to progressively increase its dividend payout going forward.

 

On Thursday, shares of Bharti Airtel ended 5.3% higher at INR 1,883.50 on the National Stock Exchange and those of Bharti Hexacom ended 1.4% higher at INR 1,509.70.   End

 

Edited by Avishek Dutta

 

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