Solid Q2 Performance by Bharti Airtel; Total Revenue up by 18% YoY, ARPU up by 6.5%

Bharti Airtel has announced its Q2FY22 results, reflecting on a positive second quarter for the telco. The second-largest telecom operator in India registered growth across the board, aided by " strong performance delivery across the portfolio".

Airtel MD and CEO, Gopal Vittal, said, "We welcome the reforms announced by the Government for the telecom industry and believe this will add to the ability of the industry to invest so as to drive India’s digital story. We hope the reforms momentum will continue and all longstanding issues impacting the industry will be addressed".

Bharti Airtel Delivers in Q2

In terms of financial performance, Bharti Airtel had a fruitful second quarter. The telco's consolidated quarterly revenue stood at Rs. 28,326 crore; the telco's India business accounted for Rs. 19,890 crores of it. The telco's net income, after exceptional items, stood at Rs. 1,134 crore. What's more, the telco's managed to complete its most recent rights issue, which will see Airtel raise up to Rs. 20,987 crore. Notably, the rights issue had a subscription of 1.44 times, overbid by both public and promoter/promoter groups.

The telco saw its consolidated EBITDA rise to Rs. 14,018 crore, up by 24.5% YoY, with its India mobile business contributing over half of it. Along with this, Airtel's India non-mobile business contributes 17.7% to the EBITDA. The telco posted an India-only EBITDA of Rs. 9,858 crore, the best in the industry. Similarly, Airtel also had the best APRU during the quarter at Rs. 153, up 6.5% on a yearly basis. The telco cited its "strategy of focusing on quality customers" for the said increase in its ARPU, which continues to be the highest in the industry.

"During the quarter gone by, we sustained our operational excellence with a healthy 5.5% sequential growth in consolidated revenues and expansion of EBITDA margin to 49.5%. Our strategy of focusing on quality customers has been validated by the strong price flow and ARPU increase that we have seen in our wireless business", Airtel MD and CEO, Gopal Vittal, said.

Therefore, it seems like Airtel has gained the momentum to do better in the next quarter, pushed on by the improving ARPU.

Catching up with Jio

As far as subscriber numbers are concerned, Bharti Airtel has a gulf to bridge. The telco reported a customer base of 355 million, about 75 million off Jio for the time being. However, the performance of a telecom operator is hardly defined by the number of users it has registered.

Over the past few quarters, Airtel has managed to have the most active customers, with over 97% of its user base being active users. Jio can only call about 78% of its users as active users. That takes Airtel's active customer base to 344 million, and Jio's to about 335 million. Therefore, Airtel has a pretty intense battle going on with Jio right now.

Apart from the sheer subscribers' count, Airtel has also managed to outdo Jio in a couple of crucial subscriber engagement metrics. The Sunil Mittal-led telco reported average data usage per customer at 18.6 GB/month and voice at 1,053 minutes/month. For comparison, Jio reported per user per month voice and data consumption reached 840 minutes and 17.6 GB, respectively.

Lastly, Bharti Airtel also rolled out an additional around 3,500 towers and about 56,000 mobile broadband base stations in the quarter, beefing up its 4G network. This has seen the telco add almost 40 million 4G customers over the last 4 quarters, taking its total 4G data user base to 192.5 million.

On paper, Airtel is ready to challenge for the top spot that Reliance Jio currently occupies.

Enterprise - Bharti Airtel's Area of Focus

Since enterprise customers generally have a higher ARPU, Airtel seems to have made a point to develop its enterprise business. The last quarter saw the telco register 11.5% YoY growth in Airtel Business, "driven by demand for connectivity, connectivity-related solutions, and CPaaS (Communication Platform as a Service) across global business and domestic businesses".

Recently, Airtel had also announced an Rs. 5,000 crore investment in ‘Nxtra by Airtel’, to make it India’s largest network of hyperscale and edge data centers. The telco will triple the data center capacity to over 400MW by 2025.

Gopal Vittal said, "the step up in the performance of our enterprise and homes business reflects the resilience and strength of our overall portfolio".

Most recently, the telco had also announced its 5G for Business initiative, where it would demonstrate 5G-based solutions and use cases to enterprise partners. The telco will test and show the various applications of 5G at its 5G test network in Manesar, Gurugram.