Bharti Airtel, India’s second-largest mobile operator by subscribers, reported a seventh consecutive quarterly increase in profit on Thursday, supported by a growing customer base and a shift toward higher-margin telecom plans, Reuters reported.
Indian operators have been trying to raise revenue by moving customers to more expensive packages. Airtel and market leader Reliance Jio have removed entry-level 4G and 5G packs in an effort to speed up migration to higher-value plans.
Airtel’s consolidated pre-tax profit rose 34.4% to 125.58 billion rupees ($1.39 billion) for the quarter ended Dec. 31, compared with 93.46 billion rupees a year earlier.
Airtel profit rises as ARPU improves and data upgrades accelerate
Airtel’s average revenue per user (ARPU), a key profitability measure, climbed 5.7% year-on-year to 259 rupees during the quarter. The company said the share of users on 4G and 5G connections increased to 79%, indicating continued upgrades to faster services.
Airtel’s India mobile user base grew 12.6% year-on-year to 465.9 million as of Dec. 31. That remained below Reliance Jio’s 515.3 million users.
One-off items and revenue growth
The latest results included a 2.57 billion rupees charge linked to the implementation of new labour codes.
In the year-ago quarter, Airtel’s profit had been boosted by 75.5 billion rupees from a higher valuation of its stake in telecom tower company Indus Towers.
Airtel’s overall revenue increased 19.6% to 539.82 billion rupees. The figure included proceeds from Indus Towers, in which Airtel acquired a majority stake last year.
Competitive backdrop in India telecom
India’s telecom market has been intensely competitive since Reliance Jio entered in 2017 and rapidly built the largest subscriber base.
Last month, Jio reported an 11% rise in quarterly profit, while smaller rival Vodafone Idea reported narrower losses, Reuters said.
Airtel executive vice chairman Gopal Vittal said in a company release that stronger cash generation and sustained deleveraging had reinforced the firm’s balance sheet and positioned it to invest in new growth opportunities.