2016 marked a massive transformation in the telecom industry in India with the entry of Reliance Jio with affordable plans. Since then, India has become the second-lowest market in terms of telecom tariff on a global level. This transformation has set low average revenue per user (ARPU) for the telecom operators, thereby taking a hit at the major players such as Airtel.
There is massive scope for upward revision, and it depends on how well the subscribers or customers get used to the new normal that prevails now.
Bharti Airtel Numbers Show Positive Future
When it comes to the numbers achieved by Bharti Airtel, it is a mixed set of numbers, but there is no major disappointment unless something is hidden, claims Gaurang Shah, Senior Vice President at Geojit Financial Services, in a report by ET Telecom.
EBITDA margins are at 49.1%, and mobile ARPU is at Rs 146. The monthly mobile data consumption per customer is 18.5 GB. Talking about this, he stated that they are working with an ARPU of Rs 140 - 142, so Rs 146 is definitely above what the back of the envelope calculation was. Also, it is a little higher than the per-user consumption of data. Eventually, this adds up to a marginal increase in the ARPU of Bharti Airtel.
Geojit, a brokerage house, has a positive coverage on Airtel with a long-term point of view. Being the country’s second-largest telecom operator, it should see better days with the government’s initiative of putting things in place.
Government’s Relief Package
The government of India has just hit the headlines as it is preparing a relief package for the telecom industry. It hasn’t revealed any plans to Kumar Mangalam Birla’s (chairman of Aditya Birla Group) offer to hand over the stake of the group in Vodafone India. The government has announced a Rs 70,000-crore package for BSNL, and its hands are full for now. We are yet to see how the government’s relief package will help Bharti Airtel, which is already going on the growth trajectory for the long term with the increase in ARPU.