The fourth quarter earnings report for Bharti Airtel is out now. A new ET Telecom report about the same has highlighted that Airtel has closed in on the little gap in ARPU (Average Revenue Per User) with Reliance Jio. However, the Sunil Bharti Mittal led telco has fallen behind on local mobile services and will need to do rapid subscriber addition to its existing base to keep up with the competition, analysts said. As per the officials, the telecom operator will now need to focus its strategies and efforts towards subscriber addition to stay in the ring with the Mukesh Ambani led telco Reliance Jio. If the telco fails to do that, it will again be left behind in the competition with the rival telcos as the ARPU gap will widen. The analysts have also added that in the coming months the incremental ARPU gains of Airtel are likely to fall.
Airtel's Subscriber Base Hovering Around 284 Million Mark
The India mobile revenue gap between the two telecom operators, Bharti Airtel and Reliance Jio has only increased. While in the December quarter, the difference was only Rs 194 crore, by the End of March quarter, the gap had grown to Rs 474 crore. Analysts are also of the thought that Airtel's subscriber base has hovered around the 284 million number since the December quarter, whereas Reliance Jio has amassed around 27 million subscribers in the quarter ending March thus gaining the upper hand in this regard with the rival telcos.
Rajiv Sharma, co-head of research at SBICap Securities said about this development, "Bharti's India wireless revenue growth at 4.3 per cent on quarter to Rs 10,632 crore in the January-March period was lower than Jio's 7 per cent despite its sharp improvement in India mobile ARPU, clearly suggesting Airtel needs to revisit its subscriber ramp-up strategy soon."
As per the estimates calculated by the brokerage firm, Airtel's monthly ARPU could have jumped as much as 21% to Rs 125 by the End of March to narrow the gap with Reliance Jio's ARPU of Rs 126.6. It is worth noting that in such a competitive industry, the ARPU remains a key metric and in the last quarter of FY19, Reliance Jio saw a sequential decline of 3% in its ARPU.
Airtel Lagging in Subscriber Addition Despite Growing ARPU
However, Sharma also said that the revenue from wireless broadband subscribers is a combination of subscriber growth and ARPU growth, the former of which, Airtel has been lagging in. Therefore, to maintain the streak of the narrowing gap, the Sunil Mittal led telco will have to keep adding subscribers.
Brokerage Emkay Global said Airtel's India wireless revenues were "above expectations, attributable to an improved revenue mix with slow pace of down-trading, continuing impact of minimum recharge plans and data subscriber additions".
Airtel, in its earnings report, hasn't shared the numbers related to its subscriber base, usage of voice and data services and has reported only ARPU and debt, given its ongoing Rs 25,000-crore rights issue, which closes on May 17.