Bharti Airtel widens lead over Jio on Arpu, but lags in revenue market share

livemint.com:

Subscribe to enjoy similar stories. MUMBAI : Bharti Airtel Ltd has done well on one count in the September quarter (Q2FY25), but fell short on another. First, the good news.

Airtel has widened its lead over rival Reliance Jio Infocomm Ltd in terms of Arpu or average revenue per user. Airtel’s Arpu rose 10.6% sequentially to ₹233 in Q2 versus 7% increase in Jio’s Arpu to ₹195. This has expanded the gap between the Arpu of Airtel and Jio to ₹38 in Q2 from ₹29 in Q1.

Interestingly, Airtel and Jio took tariff hikes in July, with the former raising tariffs by 10-21%, while the latter by 12-25%, somewhat higher. So, what explains Airtel’s higher Arpu growth? It could be attributed to several factors. Airtel is estimated to have more postpaid subscribers than Jio (though Jio does not report postpaid subscribers separately, its share in the category is estimated lower).

Airtel’s Arpu also benefits from the upgradation of its 2G users to 4G/5G (or even loss of 2G users as it reduces the denominator) with the addition of smartphone users at 4.2 million. Also, it should be noted that Jio’s tariff hike excluded some of its customers such as those with a JioBharat phone. Even after the stronger growth in Arpu compared to the rival telco, this is not the peak profitability, according to the management.

It believes that the full impact of the tariff hike is not yet reflected, and it should happen over the next couple of quarters. Nonetheless, as of Q2FY25, Airtel still lags behind Jio in terms of revenue market share in the mobility business. Jio continues to be the leader even with lower Arpu as it has a higher number of mobile subscribers, 470 million, compared to Airtel’s 350 million.