Airtel may see 13 pc annual growth in consolidated revenue by FY22: CLSA

Telecom operator Bharti Airtel is expected to witness a 13 per cent annual growth in consolidated revenue, and 26 per cent growth in EBITDA by financial year 2022, mainly driven by tariff hikes, according to CLSA.

Bharti Airtel's mobile traffic has surged for its 283 million subscribers, even though with the majority of 4G subscribers on plans offering 1-3 GB data daily and unlimited calling, there will be limited upside, a CLSA note said.

"However, we still forecast a 13/26 per cent revenue/EBITDA (Earnings before Interest Tax Depreciation and Amotisation) CAGR (Compound Annual Growth Rate) for Bharti Airtel by FY22 led by tariff hikes and 4G upgrades," it said.

CLSA said its talks with industry players had revealed data traffic has surged 20-25 per cent amid COVID-19 lockdowns across India and work from home. That said, the home broadband accounts for mere 3 per cent of India's broadband subscribers and at 19 million, has grown by about 2 million in four years.

"Bharti Airtel with 2.4 million wired broadband subscribers is the largest private player but this accounts for mere 2-3 per cent of consolidated revenues and EBITDA. Also Bharti Airtel's Rs 799 plan offers 150 GB data monthly hence limited plan upgrades are underway," the report said.

Mobile data traffic has surged as well, and consequently video streaming services - like ZEE5, Netflix, and Hotstar - have suspended high-definition (HD) and ultra-HD streaming on mobile networks.

"Data subscribers are about 50 per cent of Bharti Airtel's 283 million total mobile subscribers and already data usage had surged 2.6X to 13.9GB/subscriber/month over the past two years and the current surge will take it higher," it said.

But, with most of 4G subscribers on 28/56/84-day plans which offer 1-3GB data daily and unlimited calling, there will be limited upside from subs plan upgrades, CLSA added.

Emkay Global, in a report, said the flow-through of tariff hikes (effective in December 2019) will be reflected in Q4 revenues, though it would also depend on the recharge cycle which varies between operators.

"However, we believe that Bharti will record the highest ARPU increase in Q4 compared with Vodafone Idea and Jio. The steep tariff hikes (15-50 per cent) should also lead to SIM consolidation, resulting in subscriber losses of 1 million and 8 million for Bharti and VIL (Vodafone Idea), respectively," it said.

Besides this, gross subscriber additions should see some impact of 10 days of lockdown in March. Data subscriber addition is expected to remain decent, which should also support ARPU partially, it added.