Religare Believes Bharti Airtel Can Continue to Gain Market Share

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Religare Broking on Tuesday said in a report that the company believes Bharti Airtel can “continue to gain market share” in its mobile services segment in the upcoming quarters. The company in its report highlighted the first quarter results of Airtel where the second largest telecom operator in India recorded an 15.4% increase in its consolidated revenues on a yearly basis. Airtel reported 14.6% year-over-year (YoY) increase in its India revenues for the period ended June 30, 2020. Further, Airtel said that its revenues from the mobile services segment in the country was up 18.5% on a yearly basis.

Religare Broking Believes Bharti Airtel “Well Placed” in Telecom Sector

Airtel in its first quarter results for the period ended June 30, 2020 said that the mobile data traffic recorded a growth of 72.7% YoY. The company said that the average data usage per subscriber hit 16.3GB per month while the voice usage was at 994 minutes per subscriber per month.

“Bharti Airtel reported healthy set of numbers in Q1FY21 considering the impact of lockdown,” Religare Broking said in a report on Tuesday. “Bharti Airtel is well placed to benefit from increased traction received in digital services during COVID times, which we believe is likely to continue to going forward.”

Airtel also said that its 4G data customers were up by 43 million representing a growth of 45.3% on a yearly basis. The company said that it has 138.3 million 4G subscribers at the end of its first quarter ended June 30, 2020.

“After a steady addition of customers, we believe Bharti can continue to gain market share in the mobile services business,” Religare Broking said.

Religare Broking Expects Further Tariff Hikes in the Telecom Sector

Airtel in its first quarter results for the period ended June 30, 2020 said that the average revenue per user (ARPU) hit Rs 157 in its mobile services segment. In the same period in 2019, Airtel recorded an ARPU of Rs 129. Comparatively, Reliance Jio, the largest telecom operator in India reported an ARPU of Rs 140.3 for the period ended June 30, 2020.

Airtel said that the increase in ARPU was largely driven by the tariff hikes that the telecom operators introduced in India in late 2019. Further, the company said that its “focus on quality customers” also accounted for an increase in its ARPU. Similarly, Reliance Jio in its investor presentation also highlighted that its revenue growth was also largely driven by the “continued subscriber momentum and impact of tariff hike.”

“In our view, the tariff hike would continue from here on, to reduce the financial stress on telecom companies which would benefit Bharti Airtel due to its strong customer base and healthy addition in 4G customers,” Religare Broking said.

In the first quarter earnings call, Gopal Vittal, CEO of Airtel, said that the company believes ARPU has to hit Rs 300.

“As I have always said – we continue to believe that ARPUs need to move up to 200 and eventually to 300 for a sustainable business model,” Vittal said. “We also saw solid momentum in our Postpaid segment. While the overall numbers in the quarter were hampered by churn in our corporate customer base due we are seeing strong surge in the retail segment.”

With India easing up restrictions that were in place due to the COVID-19 lockdown under the Unlock scheme, it remains to be seen whether the operators regain momentum in their corporate user base.

“We have seen the business recover month on month. June was more resilient than May and May was more resilient than April,” Vittal said. “We see a silver lining to this disruption as we are hopeful that the importance of telecom sector has now been emphatically understood by all. Ensuring robust health of the to make it more sustainable is now also recognised.”

Vittal said that the performance of Airtel in the quarter ended June 30, 2020 was “satisfactory” due to the “unprecedented circumstances.”

“Our focus remains simple – Win quality customers, Do this through differentiation, delivering the best experience and through in market execution,” Vittal said.

Religare Broking said that the company maintains “positive stance” on Airtel due to multiple factors including “improvement in market share.”


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Born in India, Yogesh loves to travel and has lived in multiple countries including New Zealand and Canada. His bylines can be found on various newspapers and blogs throughout the world, including Vancouver Sun, Surrey Now-Leader, Daily Hive , Investing News Network and Rach F1.

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