Airtel Q1 ARPU growth due to more postpaid users, entry level rate hikes

economictimes.indiatimes.com:

India mobile average revenue per user (ARPU) reported by Bharti Airtel for the fiscal first quarter has been aided by better subscriber mix with more postpaid customers added in the quarter, and the full impact of the entry level tariff interventions taken by the telco from November 2022 to March 2023, analysts said. Airtel’s ARPU for the quarter at Rs 200 beat street estimates of Rs 197, indicating that its premiumisation strategy is being executed effectively, they added. “Bharti’s 1Q performance is yet another indicator of its strong execution backed by an effective premiumisation strategy and cost control, that is yielding results in the form of market share gains, robust FCF (free cash flow) generation, and B/S (balance sheet) deleveraging, notwithstanding high ongoing capex,” analysts from Citi said.

Airtel's consolidated revenue for the quarter grew 14.1% on year at Rs 37, 440 crore, while consolidated earnings before interest, taxation, depreciation and amortisation (EBITDA) grew 18.9%. Consolidated profit for the quarter was flat on-year due to exceptional loss reported by the Africa business on the back of the devaluation of the Nigerian Naira. Airtel's India revenue grew 17.3% on year while EBITDA was up 19.1%.

Airtel reported 3.1 million net additions to its subscriber base versus market leader Reliance Jio’s 9.2 million net additions for the quarter ended June 31. However, Jio’s ARPU growth came at around 1% (Rs 180.5 in Q1FY24 and Rs 179 in Q4FY23), lower than Airtel’s ARPU growth of 3.6% for the quarter. “Rise in ARPUs was the key driver for the 12% YoY growth in India Mobile revenues,” Jefferies analysts said.