Bharti Airtel Longer-Term Growth Story Intact: MOFSL

Bharti Airtel has been continuously adding overall wireless subscribers for many months, and the telco has also seen decent earnings growth for the last 12 quarters. Bharti Airtel has made entry-level tariffs of Rs 155 in all circles. However, considering the low probability of further price hikes and high capex involved over the next 2-3 years for 5G rollouts, Network Expansion, and rural densification, MOFSL expects a period of soft earnings.

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Also Read: Bharti Airtel Leads 4G Subscriber Net Additions in Nov: MOFSL

5G Rollouts and Rural Expansion

According to the report, Bharti Airtel has guided for India Mobile capex of INR 750 Billion for the next three years, and the telco aims to roll out 5G across urban areas by March 2024. However, MOFSL, in its report, expects that the capex will exceed the target as historically happened during the 4G rollout, and the same will be the case with 5G as a new technology upgrade cycle.

As the 5G eco-system develops, it is expected that the requirement of deployment of additional spectrum bands, Standalone 5G and VO5G calling may require heavy investments.

The report noted that Bharti’s cumulative Operating Cash Flow/Free Cash Flow of INR 1.4 trillion/Rs 700 billion for the next two years and inflows from approximately Rs 210 billion rights issue could help the company reduce debt. The report expects the Gross and net debt to decline in FY25.

Also Read: Vodafone Idea Continues Its Streak; Lost 1.3 Million Wireless Subscribers in Jan: TRAI