Beating all estimates, Indian telecom major Bharti Airtel Ltd on Tuesday announced to have bettered its revenue for the third quarter on tariff hikes and additions to its 4G subscriber base.
The company's consolidated revenue from operations for the quarter ended December 31 climbed to $4 billion from $3.5 billion a year ago. Analysts had expected revenue of $3.9 billion, according to Refinitiv IBES data.
According to Airtel, the company's average revenue per user (ARPU) — a key performance indicator in the telecoms industry — was 163 rupees for the third quarter, up from 146 rupees a year ago.
The sector, which witnessed a fierce price war following the entry of billionaire Mukesh Ambani's Reliance Jio in 2016, benefited from increased data usage during the Covid-19 pandemic as more people took to remote working.
Against this backdrop, Airtel in late November increased tariffs on prepaid plans, as did Reliance Jio and Vodafone Idea, while reiterating that the industry's mobile ARPU needs to be at 200 rupees, and eventually at 300 rupees, for a financially healthy business model.
While adding up to better Q3 results, Airtel also announced plans to raise $1 billion in debt, after it reported better-than-expected quarterly revenue on higher tariff rates. Airtel said, “it would raise the amount, 75 billion rupees ($1 billion), by issuing non-convertible debt securities, including debentures and bonds, but did not reveal how it would use the money.”
Engaged in a fierce price war that started since the entry of Mukesh Ambani backed Reliance Jio into the Indian telecom sector in 2016, Airtel has been raising capital for the development of its products and services to lure more customers.
Last month, Alphabet Inc's Google said it will invest up to $1 billion in Airtel to help with the development of its devices, home broadband, data centres, cloud adoption and 5G networks.
India's telecom sector has been benefiting from increased data usage as more people take to remote work due to the COVID-19 pandemic. Mobile data consumption for Airtel, India's second-largest telecom company by subscriber base, rose 33.8% in the third quarter from a year earlier.
The company in November increased tariffs on prepaid plans, as did rivals Reliance Jio and Vodafone Idea, reiterating that the industry's average revenue per user (ARPU)— a key performance indicator in the telecoms industry — needs to go as high as 300 rupees for a financially healthy business model.
Third-quarter ARPU for Airtel rose 11.6% to 163 rupees, ahead of Jio's 151.6 rupees. Airtel's subscriber base in India grew to about 356 million, adding 3 million 4G subscribers during the last three months of 2021 to reach 195.5 million.
