BHARTIARTL

’s Q3 Margins Stable, Africa and Data Centres Drive Next Phase

reported 4.1% QoQ growth in consolidated EBITDA to ₹30,783 crore in Q3FY26, with India mobile services EBITDA rising 2.2% and Africa mobile EBITDA up 6.8% in constant currency. While Africa showed stronger user and data growth, India’s Arpu rose just 1.1% QoQ to ₹259, reflecting saturation and limited impact from premiumization. Airtel’s strategic focus now includes AI monetisation, data centre expansion, and maintaining financial flexibility for future growth. India Mobile Services - Subscriber base: 369 million, up 1.2% QoQ. - Arpu: ₹259, up 1.1% QoQ, driven by stable pricing and limited postpaid migration. - Premium pricing for 5G remains challenging due to user confusion between 4G and 5G usage. - Traditional Arpu drivers (e.g., roaming, postpaid upgrades) had minimal impact. Africa Mobile Business - Subscriber growth: +3.2% QoQ; data users up 4.7%, now 45.6% of base. - Data Arpu: $2.70 vs $1.10 for voice, indicating monetisation potential. - Data usage per customer: ~10 GB/month, one-third of India’s 30 GB/month. - Currency devaluation remains a key risk to profitability. Strategic Initiatives - AI monetisation: Airtel offers Perplexity AI, similar to Jio’s Gemini tie-up. - Revenue share possible if users adopt paid AI plans, but uptake may be slow. - Data centres: Airtel aims to grow market share from 12% to 25% in 3–4 years. - Capex flexibility supported by ₹50,000 crore annual free cash flow from India mobile ops. Capital Allocation & Valuation - Net-debt-to-EBITDA: 1.2x, factoring in ₹16,000 crore rights issue proceeds. - Management not pursuing higher leverage or dividend hikes currently. - Valuation: EV/EBITDA of 10x (FY28E), seen as reasonable given near-duopoly status. - Jio’s upcoming listing may impact Airtel’s scarcity premium as a sole listed telecom play.