Bharti Airtel, led by billionaire Sunil Mittal, reported a larger-than-expected quarterly profit, boosted mostly by one-time gains and the higher user fees it imposed in July.
India’s No 2 wireless carrier, posted a 506% jump in net income to 147.8 billion rupees (US$1.7 billion) for the quarter ended Dec 31, 2024 compared with the same period last year, according to a filing Thursday. That beat the average 50.2 billion-rupee profit estimated by analysts in a Bloomberg survey.
The profit surge was on the back of an exceptional item of 75.5 billion rupees that includes profit from an enhanced stake in Indus Towers and forex gains among others.
Revenue rose 19% to 451.29 billion rupees, also surpassing analyst estimates. Total costs climbed 14% to 205.3 billion rupees.
India average revenue per user, or ARPU, for the quarter was 245 rupees — still way below the 300-rupee mark that Bharti has been asking for a while as the minimum needed for the country’s telecom operators to fund growth plans.
“India mobile delivered strong performance led by residual flow-through” of increased telecom fares and the push toward premium services, Gopal Vittal, vice-chairman and managing director said in a statement Thursday but reiterated his earlier stance that another round of price hikes were needed.
See also: Jardine Matheson posts loss of US$468 mil, but underlying net profit stood at US$1.47 bil
The wireless carrier is “stepping-up investments in digital services” across cloud, security and Internet of Things while “shedding very low margin commodity voice and wholesale business,” he said.
Key Insights
The robust performance helps the wireless carrier as it seeks to bolster its 5G services, lure more high-paying users and claw back some market share from sector leader Reliance Jio Infocomm.
Brokerages had widely anticipated Bharti Airtel’s profit will benefit from mobile plan prices that were raised by 10% to 21% in early July.
Reliance Jio, Bharti and smaller rival Vodafone Idea had announced price hikes within hours of each other, underscoring the oligopolistic dynamics of India’s telecom market which has only three private sector wireless operators now.
Indian carriers are likely to again increase prices by 10% in 2025 and introduce 5G-specific pricing this year, Jefferies analysts Akshat Agarwal and Ayush Bansal wrote in a note.
Bharti’s user base in India expanded 4.2% to 413.9 million users for the quarter. Reliance Jio last month posted an ARPU of 203.3 rupees on a user base of 482.1 million.
Africa operations, which had been a pain point in previous quarters, have begun looking up with mobile services revenue rising almost 4% for the carrier in the December quarter.
“Africa maintained strong constant currency sequential growth trajectory of 5.6%,” Vittal said
Airtel Africa reported net income attributable to holders for the December quarter of US$133 million vs. loss US$6 million last year. It has been consistently reducing forex debt exposure, having repaid US$739 million over the last year
India is expected to publish rules for the satellite internet industry this year and paving the way for companies like Starlink. This is already stoking a battle of billionaires as Elon Musk’s firm and Mittal-backed OneWeb vie for a piece of the Indian market while Ambani’s firm pushes back.
Reliance Jio and Bharti are wary of Starlink securing cheap spectrum and undercutting their terrestrial wireless phone networks.
