Bharti Airtel, the country’s largest telecom operator, has raised its estimate of capital expenditure for this financial year to Rs 25,000 crore, from the earlier Rs 20,000 crore. Nilanjan Roy, its global finance head, said as there was an explosion of data traffic in India, the company had decided it should hasten the roll-out of fourth-generation (4G) technology, beside the building of additional capacity and fibre connectivity. “Consequently, our capex forecast for the year is up from the initial guidance (expectation). We believe advancement of future capex to provide best broadband data coverage will augment our growth and revenue market share ambition,” he said during an investor call after announcing its quarterly results. He said a lot of the capex was going into investing in the radio networks, primarily 4G, in transmission and fibre backhaul. Analysts say despite a 76 per cent drop in net profit for the September quarter, the Sunil Bharti Mittal-led company has shown strong defences against Reliance Jio. A UBS report says Airtel’s India mobile Ebitda (earnings before interest, taxes, depreciation and amortisation) margins improved from the earlier quarter, despite five per cent less revenue. Airtel added data subscribers, with data volumes growing 66 per cent from the June quarter and average usage reaching 4 GB per subscriber. “In short, Airtel has managed the competitive onslaught from Jio well, by continuing to grow subscribers and improving market share, while protecting margins at healthy levels,” UBS said. JP Morgan says despite data volumes rising 440 per cent year-on-year and voice minutes going up 40 per cent, Airtel’s India wireless revenues are down 17 per cent over a year, showing the need for monetising the rising usage. “Of course, this has been RJio-dictated so far and with RJio showing intent to raise its tariffs (rates), it appears the floor for Arpu/tariffs in the industry is to progressively go higher,” it said.
Arpu is average revenue per user. Analysts say the telecom industry’s medium-term outlook has brightened, with accelerated consolidation and exit of smaller companies, besides Jio continuing to raise its rates. “We expect Bharti (Airtel) to capture the lion’s share of revenues belonging to exiting telcos, thanks to the deals with Telenor and Tata, large spectrum holding, strong balance sheet and execution-focus,” said JM Financial.Ebitda margins from Africa were 32.4 per cent, the highest ever; these had never crossed 30 per cent prior to this quarter. Africa has also registered impressive revenue performance, of nearly seven per cent growth from the earlier quarter.