Bharti Airtel Management Guidance Tracker

CapEx front-loaded in H1, with full-year spend in line with guidance, focused on 5G, broadband, and data centers.

Peak CapEx in FY24; radio CapEx will moderate next year, though transport and data center spend continues.

Management indicated that FY24 is an elevated CapEx year, and CapEx will moderate in the next fiscal year.

Management expects clear moderation in overall CapEx in FY25 after peak levels in FY24, driven by lower wireless CapEx.

Full-year capex will be lower than FY24, with India mobile capex expected to moderate.

CapEx will be lower than FY24, which was a peak year due to 5G and site rollout. Q2 CapEx was INR 6,250 crore, and the trend is expected to continue.

CapEx for FY25 will be lower than FY24, and moderation will continue into FY26, with CapEx/revenue trending down toward global peer levels.

Management guided that total CapEx will trend downwards in FY26, driven by substantially lower rural rollout and moderation in radio CapEx.

Radio CapEx is declining; cloud CapEx is modular with two regions operational and headroom available.

While near-term capex may be elevated due to home broadband and data center investments, management expects a directional decline in capex as a percentage of revenue over the medium term.

Airtel plans to scale data center capacity from ~130MW to 1GW, targeting ~25% market share.

Management indicated that total capex for FY27 will be in the ballpark of FY26 levels (~INR 31,000 crore for India), with focus on fiber, edge data centers, and homes.

Management targets ARPU of INR 300 over the long term, driven by premiumization levers and potential tariff reset.

Expect global business order book to pick up in about two to three quarters as OTT spending normalizes.

Management expects to start refarming 4G spectrum to 5G and move to standalone architecture over the next two years.

Expect to roll out over 25,000 sites in the next couple of quarters to plug coverage gaps in rural areas.

Domestic enterprise business continues to grow at 18-20%, driven by adjacencies like CPaaS, IoT, and cloud.

Management reiterated that the industry requires ARPU of at least INR 300 for sustainable investment and respectable returns.

The project to add 25,000 rural sites will be mostly completed by the end of the fiscal year, with only a few circles remaining.

Expect continued growth in home broadband via FWA expansion, fiber rollout, and channel expansion to 100,000 points of presence.

Management aims to step up fiber home pass rollout from current 1.7 million per quarter to over 2.5 million.

Management expects postpaid net adds to increase from current 600K per quarter as tariff repair impact settles.

Underlying B2B revenue grew 2% QoQ after exiting low-margin business; order book and funnel remain strong.

Management expects the home broadband market to grow from ~50 million to 100 million connected homes over the medium term, with Airtel investing aggressively to capture share.

Management expects to drive ARPU through feature-to-smartphone upgrades, prepaid-to-postpaid, data monetization, and international roaming.

Airtel Money received RBI approval to operate as an NBFC and is moving towards commercial launch, with monthly loan disbursement run rate over INR 550 crore.

60% of 60,000 high-potential villages already covered; rollout expected to conclude by year-end.

Airtel Air Fiber (FWA) with outdoor CPE to be launched in full by end of 2023, complementing FTTH.

Fixed wireless access will be at scale in the coming eight weeks (by Q2 FY25), complementing FTTH in weak fiber areas.

Fixed wireless access will be launched on standalone 5G architecture nationally by August/September 2024.

Trials for standalone 5G on FWA are underway, and commercial deployment is planned by December 2024 to improve uplink performance.

Management plans to significantly step up data center capacity, with multiple builds underway and aspirations to increase market share from 12%.

Management aims to increase quarterly fiber home pass additions from 1.6 million to 2.5 million.

Airtel aims to scale Nextra's capacity to over 1 GW in the next few years, a four-fold increase from current operating capacity, driven by the Google partnership and organic expansion.

Airtel is rolling out 2 million fiber home passes per quarter to support broadband growth.

Nxtra aims to build 1 GW data center capacity, supported by a $1 billion fundraise from marquee investors.

Harjeet Kohli stated the goal is to reach closer to 2.5 or below for India leverage in the next 4-6 quarters.

Free cash flow will be used for deleveraging, dividend step-up, and selective bolt-on acquisitions in B2B adjacencies.

Management reiterated commitment to step up dividends as leverage declines.

Board recommended dividend of INR 24 per share, up from INR 16 last year, reflecting commitment to progressive payout.

The July tariff hike is expected to fully reflect in revenue within two quarters, with early signs encouraging.

Management expects the full impact of the recent tariff increase to be reflected in the coming quarters, with normalization of customer trends already seen in October.

Exiting commodity voice and messaging business will reduce top line over ~6 months but have negligible EBITDA impact.