India's Bharti Airtel misses Q3 profit view as costs outweigh subscriber growth

Airtel and rival Reliance Jio Infocomm are racing to capture a bigger share of India's telecom market, with billions of dollars of investments to expand 4G and 5G services

Reuters
Published : 6 Feb 2024, 01:09 AM
Updated : 6 Feb 2024, 01:09 AM

India's Bharti Airtel, opens new tab reported third-quarter profit below estimates on Monday, as flat tariffs and higher expenses outweighed a growth in subscribers.

The telecom operator reported a consolidated net profit of 24.42 billion rupees ($294 million) for the quarter ended Dec 31, compared to analysts' estimate of 28.69 billion rupees as per LSEG data.

Airtel and rival Reliance Jio Infocomm are racing to capture a bigger share of India's telecom market, with billions of dollars of investments to expand 4G and 5G services.

Jio's market share stands at 39.49% of Nov 30 and Airtel has a 32.91% share, while Vodafone Idea, opens new tab trails with 19.44%, according, to the Telecom Regulatory Authority of India.

Airtel's 4G/5G subscriber base rose to 244.9 million users, up 13% from year ago and 3.1% from last quarter.

Average revenue per user (ARPU), a key financial metric where Airtel leads its rivals by a wide margin, rose to 208 rupees from 193 a year ago and 203 in the last quarter.

Analysts had estimated ARPU in the range of 205 to 208 rupees.

"ARPU and subscriber count growth reflects a strategy focused on growing a lower number of high value customers and converting existing 2G users to 4G," said Utkarsh Sinha, managing director of boutique advisory firm Bexley Advisors.

Airtel, however, did not raise tariffs - a trend it has followed since 2021, but which analysts expect will end in mid-2024 after India's general elections.