Airtel Records Improved ARPU Despite No Hike in Tariff
The second-largest wireless operator in India said that its India business registered quarterly revenues of Rs 19,007 crore, translating to a 25.1% YoY increase. Airtel said that the mobile ARPU was at Rs 166 in its third quarter of the current financial year as compared to Rs 135 in the previous year quarter. The operator said that its consolidated Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was at Rs 12,178 crore for the quarter ended December 31, 2020. “The major positive read-through is continued strong subscriber addition and ARPU traction that percolated into superior EBITDA,” ICICI Direct said in its report on Thursday. Motilal Oswal Financial Services on Thursday said that the operator’s India wireless EBITDA was up 13% quarter-on-quarter (QoQ) “despite no tariff hike.” Crucially, the Indian diversified firm engaged in the financial services highlighted that the India wireless EBITDA was 10% above estimate. “ARPU continued to see a steady uptick, it came in 2% QoQ higher at Rs 166,” Motilal Oswal said in its report on Thursday. “This was led by a mix benefit from healthy 4G subs adds and revenue recovery from the COVID-19 impact. ARPU has improved 8% since 4QFY20, without any tariff hike.” Airtel said that its 4G user base was up 12.9 million in its third-quarter with the total 4G customer base now hitting 165.6 million. Motilal Oswal also said that Airtel recorded 14.2 million overall subscriber additions in the third quarter as compared to 1.7 million recorded by Reliance Jio. The financial services firm said that the subscriber additions by Airtel highlight that it has “continued to gain the lion’s share” of the subscriber loss registered by Vodafone Idea. “The second straight quarter of high adds for the company, accounting for nearly 90% of industry adds,” Motilal Oswal said in its report on Thursday. “For the past six months, Bharti’s pace of subscriber additions has grown robustly and consistently.”
Airtel Data Traffic, Subscriber Base at 50% of Reliance Jio Levels
In its quarterly report, Airtel highlighted that the total data traffic on its network touched 8.5 billion GB, translating to an 52.4% YoY increase. In comparison, Reliance Jio, the largest wireless operator in India recorded total data traffic of 15.86 billion GB. “Bharti’s data traffic and data subscribers are ~50% of RJio’s levels, with the capacity gap much lower,” Motilal Oswal said in its report on Thursday. “This highlights a healthy network capacity and room for improvement.” The financial services firm also highlighted that Airtel has over 568,000 base tower stations, “closer to RJio’s levels” with over 207,000 unique broadband towers. In a standalone report on Friday, ICICI Direct highlighted that Airtel added around 700,000 postpaid users “driven by omni-channel capabilities.” “While it (Airtel) rooted for tariff hike need for decent RoCE (Return on capital employed) generation, management reiterated that they would drive ARPU growth ahead through natural upgrade to 4G and acceleration to post-paid but tariff hike will be function of competitive intensity,” ICICI Direct said in its report on Friday. Meanwhile, Airtel is also said to have registered 215,000 new Xstream Fiber users in its third quarter of the current financial year. The operator in its quarterly report said that its Xstream Fiber services are available in 219 cities across India including 120 cities under its partnership with local cable operators (LCO). “Home (Xstream Fiber) posted 8% decline in EBITDA but reported a strong 8% subscriber adds and increased coverage, which should prove advantageous in the coming quarters,” Motilal Oswal said in its report on Thursday. The company management in the earnings call said that “there has been a explosion in home broadband” due to the COVID-19 pandemic. Further, the “increased penetration of streaming services” is also said to have resulted in an uptick for the need for home broadband. Airtel said that it is soon planning to offer its Xstream Fiber services in 1000 cities across the country.
