Bharti Airtel: More 4G users take Arpu to high of Rs 162

A tariff hike in December 2019, a strong 14 million addition of 4G subscribers, and data usage remaining in the high zone of 16 GB a month saw Bharti Airtel’s average revenue per user (Arpu) rising to a three-year high at Rs 162 during the July-September quarter. Having made full provisioning for the adjusted gross revenue (AGR) dues in the preceding quarter, the company was able to considerably narrow its consolidated net loss at Rs 763 crore compared with Rs 15,933 crore in the preceding quarter.

Still, it missed Bloomberg consensus estimate of a slender profit of Rs 121.55 crore. This was the sixth consecutive quarter during which it posted losses. However, the company beat estimates on the revenue and operating profit fronts.  Consolidated revenue during the period increased 7.71% sequentially at Rs 25,785 crore while Ebitda at Rs 11,848 crore was 11.36% higher than the preceding quarter.  Ebitda margin stood at 46% compared with 44.4% in the preceding quarter.  India revenues at Rs 18,747 crore was up 6.58% against the preceding quarter, while India mobile revenues saw a jump of 7.42% at Rs 13,832 crore.

The company continued to improve its Apru which at Rs 162 was 3.4% higher than the preceding quarter. Minutes of voice usage per customer per month improved 1.1% quarter-on-quarter at 1,005 minutes. However, data usage per customer per month was down 1.5% sequentially at 16,409 MB. Still at 16 GB it is quite strong and best in the industry. A marginal decrease may be attributed to work from home practice which saw a chunk of subscribers using wireline broadband. Total data volume saw a jump of 5.5% q-o-q at 76,39,997 million Mbs.

The positive part is that Bharti has been able to hold on to its customers with the monthly churn coming down to 1.7% compared with 2.2% during the preceding quarter. This means that a good chunk of its 2G users are upgrading to its 4G network which may see incremental growth in Apru in the subsequent quarters also even if the company does not hike tariffs. Of the company’s total 293 million subscribers, now 152 million are 4G users. The 4G subscriber addition saw a 10.4% jump on a sequential basis.

“Despite being a seasonally weak quarter, we delivered a strong performance with revenue growing at 22% y-o-y. In the mobile segment, we added over 14 million 4G customers and grew revenues by 26%. Our data consumption grew by 58% y-o-y which reflects strong engagement of customers on our network. We stay committed to improving the profitability of the business. Our continued focus on Arpu improvement and cost optimisation led to Ebitda margin expansion by over 158 bps in the quarter sequentially,” Gopal Vittal, MD and CEO, India and South Asia said.