Higher tariffs lift Bharti Airtel's Q2 profit 168%, Arpu tops Rs 230

Bharti Airtel’s net profit in the July-September quarter (Q2) of FY25 rose 168 per cent year-on-year (Y-o-Y) to Rs 3,593 crore as against Rs 1,340 crore in the same period a year ago as a result of higher telecom tariffs imposed in early July.

  Sequentially, profit was 13.6 per cent lower than the Rs 4,159 crore in the preceding quarter. The earnings figure fell short of the average Rs 4,398 crore profit estimated by analysts surveyed by Bloomberg.

 

The company attributed the rise in profit to tariff repair, strong smartphone data customer additions, and underlying mix improvement.

 

Consolidated revenue from operations came in at Rs 41,473 crore in Q2, higher by 1 per cent from Rs 37,043 crore in Q2FY24. Other income in the quarter under review stood at Rs 254 crore.

 

The company’s average revenue per user (Arpu), a key performance metric for telecom firms, rose 14.7 per cent Y-o-Y to Rs 233, up from the Rs 203 in Q2FY24. As a result of the tariff hike, it shot up by 10.6 per cent sequentially, up from Rs 211 in Q1.  Airtel’s Arpu is the highest in the industry, beating Jio’s Rs 191.5 and Vodafone Idea’s Rs 146 (as last reported by both companies).

 

However, the tariff hikes hit subscriber numbers, with Airtel’s customer base in India reducing by 2 million in the latest quarter to end at 407 million at September-end. This was lower than market leader Jio’s 10.9 million subscriber loss in Q2. Airtel’s monthly churn increased to 3.2 per cent, higher than Jio’s 2.8 per cent.

 

Bharti Airtel’s revenue from the India business in Q2 was Rs 31,561 crore, up 16.9 per cent Y-o-Y. Mobile services in India, which account for a significant portion of the revenue, at Rs 24,837 crore, also grew at 18.5 per cent annually, up from Rs 20,952 crore in Q2FY24. The rate of growth was 10.5 per cent in Q1.

 

 

The telco’s consolidated earnings before interest, tax, depreciation, and amortisation (Ebitda) during the quarter were Rs 22,021 crore, while the Ebitda margin was 53.1 per cent.

 

“We delivered another quarter of solid performance, with India revenue growing 8.7 per cent sequentially. The flow thru of tariff repair is in line with our expectation on Arpu increase and SIM consolidation,” said Managing Director Gopal Vittal.

 

Airtel’s home business added 583,000 new users in Q2, up from 348,000 new users in Q1. It had a base of 8.6 million users. A major bet for the telco, the homes business saw a 17.6 per cent growth rate.

 

Airtel expanded its Wifi coverage with fixed wireless access offers to over 2,000 cities at Q2-end, up from 1,300 cities in the preceding quarter.

 

  Postpaid subscribers grow

 

Net addition to the premier postpaid segment stood at 800,000 in the latest quarter, the same as in the preceding two quarters. Growth had been higher earlier, at 900,000 and 1 million subscribers in Q3 and Q2, respectively of FY24. The number of postpaid users stood at 24.7 million.

 

On a consolidated basis, the number of smartphone data customers was up by 26.2 million, an 11 per cent Y-o-Y increase, now making up 75 per cent of the overall mobile customer base.

 

Mobile data consumption increased 22.6 per cent annually, with consumption per customer rising to 23.9 GB per month in India.

 

Airtel rolled out 5,000 towers and 15,200 mobile broadband stations over the quarter to further strengthen network coverage.