Bharti Airtel Q3 net profit jumps 91% to ₹1,588 crore, misses estimates

• India’s second largest telecom company Bharti Airtel reported a 91% year-on-year rise in its Q3 net profit to ₹1,588 crore.
• This fell short of analyst estimates of a net profit of ₹2,673 crore.
• Airtel reported a moderate uptick in its average revenue per user to ₹193 in Q3, sequentially.

India’s second largest telecom company Bharti Airtel reported a 91% year-on-year (YoY) rise in its Q3 net profit to ₹1,588 crore, but still significantly lower than the average analyst estimates of ₹2,673 crore. On a sequential basis, however, the telco reported a 26% decline in its net profit.

Airtel’s revenue came in slightly higher than analyst estimates of ₹35,299 crore during the quarter. The telco reported a 20% YoY growth in its revenue to ₹35,804 crore, beating analyst estimates by a thin margin.

On a sequential basis, the topline growth stood at 3.7%, largely driven by 4G subscriber additions and an uptick in average revenue per user (ARPU).

Airtel’s net profit missed analyst expectations despite only a mild uptick in its spectrum usage charges (SUC), which grew only 4% YoY to ₹2,842 crore. The overall expenses grew at 14% on average during the quarter.

The telco managed to report a moderate uptick in its average revenue per user to ₹193 during the December quarter, thanks to an increase in its 4G subscriber base, which increased to 216.7 million from 210.3 million.

Overall, its 4G subscribers as a percentage of total subscribers stood at 59% in Q3, slightly up from 58% in the same period a year ago. “Our strategy of winning quality customers has helped us add 6.4 million 4G customers and exit the quarter with an industry leading ARPU of ₹193,” said Gopal Vittal, managing director, Bharti Airtel.

Also aiding Airtel’s ARPU growth in the December quarter was a 22.5% YoY increase in data consumption to 20.8GB per user per month.

In terms of margins, too, Airtel reported a moderate uptick during the December quarter. The telco’s earnings before interest, taxes, depreciation and amortization (EBITDA) margins rose to 52.7% in Q3, from 49.7% a year ago.

“Postpaid, enterprise, homes as well as our Africa business sustained their momentum while the DTH business showed signs of growth in an industry that continues to be under pressure,” Vittal added.

Bharti Airtel’s Q3 in numbers:


Source: Company reports

Airtel’s India subscriber base grew by 5 million sequentially in the December quarter, while its overall subscriber base stood at 510.8 million, up 9.3 million when compared to the previous quarter.

5G rollout on track to all towns by March 2024

Talking about the company’s 5G rollout strategy, Vittal said that the company intends to expand the coverage to all towns by the end of FY24.

“Our 5G rollout is on track to cover all towns and key rural areas by March 2024,” Vittal said.

Airtel’s 5G services are currently live in over 40 cities, the company said. Its rival Reliance Jio currently has 5G coverage in 236 cities around the country, nearly 6x as much as Airtel.

Simplified pricing, improved services drive digital TV biz

Airtel reported an addition of 2.14 lakh customers in its digital TV business, its best performance in the last eight quarters. The company credited this to its strategy of a simplified pricing structure and improved services.

“This is a result of the company's strategy of simplified pricing and differentiated converged experience to win high value customers. Focus on high value channels and quality acquisitions has yielded customer gains leading to an overall base at 16 million at the end of the quarter,” Airtel said in an exchange filing.

In its bid to simplify and diversify revenue streams at the same time, Airtel announced simpler plans under its Airtel Black offering in Q3. This service unifies DTH, fibre and postpaid services in a single bill.

Apart from this, improved digital offerings across services like — Thanks, Wynk and Xstream also helped the company grow its user base to 200 million monthly active users, the company said.

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