Airtel widens Arpu gap with Jio, buoyed by premium customers, improved service

Bharti Airtel, India’s second-largest telecom operator by market share, overtook larger rival Reliance Jio in terms of revenue per customer in the September quarter, driven by premium customers joining its network and a consistent focus on better service quality.

Airtel, the industry leader in average revenue per user (Arpu) ₹It saw a sequential increase of 2.4% compared to Jio’s growth of 1.2%, which took Arpu to 256 in the month. ₹211.4 at the end of the September quarter. Arpu is an important metric for telecom companies that shows the average revenue they receive from each user; the higher it is, the stronger the work.

On Monday, the Sunil Bharti Mittal-led telecom operator announced its September quarter results. The company reported strong earnings, driven by an increase in mobile data consumption, an expanding subscriber base and a recovery in the enterprise segment (Airtel Business) following a three-quarter decline in revenue. Airtel Business, which houses enterprise connectivity solutions including data centres, cloud and internet of things (IoT) solutions, saw a sequential increase after three consecutive quarters of decline as the company exited its low-margin wholesale commodity voice and messaging business.

Bharti Airtel reported the following revenue: ₹52,145 crore in the September quarter, up 25.7% YoY and 5.4% QoQ. ₹49,463 crore, according to the company’s earnings release. The company’s revenue was largely driven by growth in its core mobile services business, which focuses on premium services and growth in Airtel Africa.

“Jio seems to be going after the mass market more, whereas Airtel has been talking from the very beginning that it is largely focusing on premium customers. Given Jio’s focus on market share, it seems difficult for it to look aggressive in closing the gap on Arpu,” said Faisal Kawoosa, principal analyst at Techarc. According to Kawoosa, the removal of entry-level data plan by operators may also have caused Arpu increase for Airtel in the quarter.

Net profit increased by 89% compared to the previous year ₹6,792 crore, helped by lower losses in subsidiaries and joint ventures during the quarter. A lower financing cost also boosted profits during the quarter. Airtel’s net profit increased by 14.19% sequentially. ₹5,948 crore in the previous quarter.

A steady quarter for Airtel comes at a time when the Supreme Court allowed the government to provide relief to Vodafone Idea on additional adjusted gross revenue (AGR) dues for the period up to 2016-17.

Investors are expected to monitor Airtel’s stance on the tariff hike during its call with analysts on Tuesday, especially as Jio denied any immediate plans to hike tariffs.

Also, any guidance on whether Airtel will make its case for AGR mitigation will be important. Earlier, Airtel had appealed to the government to convert some of its AGR dues into equity capital.

“The India mobile business added 5.1 million smartphone customers, delivering 2.6% revenue growth and maintaining Arpu as the industry leader. ₹256, thanks to continued premiumization of the portfolio and a determined focus on quality customers. Vittal added that the postpaid segment recorded one of the highest quarterly net earnings of 1 million. As of September-end, the company has 27.5 million postpaid users.

“We believe the change in tariff structure is critical to sustainably grow Arpu without hurting core plans while accommodating rising revenue levels for Arpu’s expansion. Tweaking the 5G tariff structure and push for 5G adoption will help premiumization continue for longer,” analysts at ICICI Securities said in an October 24 note.

On: ₹28,116.7 crore, the Indian mobile services business contributes 54% to Bharti Airtel’s total revenue. It is noteworthy that Airtel Business saw a sequential increase after three quarters of continuous revenue decline.

“Airtel Business reported strong results with sequential revenue growth of 4.3%. We saw a number of deals won in the connectivity, IoT (Internet of Things) and security business,” Vittal said. This quarter, Airtel published a report: ₹5,276 crore from the business segment. However, this was 6.7% lower year-on-year.

“The business appeal of the business is increasing with the adoption of digital services such as cloud, cybersecurity, CPaaS (communication platform as a service) and IoT; telcos are also participating in the data center business and large untapped managed services and distribution of AI applications in the MSME segment,” analysts at ICICI Securities said. he said.

While Kawoosa also sees a positive development for telecom operators in the data center and cloud business, he said operators are not thinking beyond deployment for their AI offerings. “Maybe in the short term they will be able to gain market share by deploying generative AI models to consumers and businesses, but in the long term they will have to create a value proposition,” he said.

Three months after Airtel rolled out Perplexity to its subscribers, Reliance Intelligence on October 30 announced that it has collaborated with Google to offer the latest version of Google Gemini AI Pro to Jio users. ₹35,000 free for 18 months.

Of course, Airtel added 1.4 million mobile users in the September quarter; This was up from 1.2 million mobile subscribers in the June quarter. As of the end of September, the company’s total mobile subscriber base in the country stood at 364 million, while Jio’s was 506 million.

Revenues in the home business, which includes home Wi-Fi, broadband and TV connectivity, rose 30% year-on-year. ₹1,865 crore. “Our Homes business has gained strong momentum, with net customer additions of 951,000 and sequential revenue growth of 8.5%. IPTV services continue to gain strong momentum, reinforcing our connected home priority,” Vittal said.

The company’s digital TV business saw a marginal decline in revenue ₹753 crore during the quarter.

african market

Airtel’s African market accounts for approximately 26% of its consolidated revenue. In the September quarter, Airtel Africa’s revenue rose 24.2% year-on-year to $1.6 billion in constant currency, driven by growth in data usage and Airtel Money expansion in the region.

Last year, Jio Platforms, through its subsidiary Radisys, announced its entry into the African market not as a telecom service provider but to provide network infrastructure in Ghana.

Radisys partners with Next-Gen Infra Co. to establish shared 4G and 5G fixed broadband network infrastructure in Ghana. announced its partnership with (NGIC).

The partnership also includes digital infrastructure provider Ascend Digital, Finnish technology and telecom company Nokia, Swedish telecom company Ericsson and IT services giant Tech Mahindra to roll out 5G infrastructure across Africa.