Airtel Arpu Growth & Capex Decline: Key Telco Trends

Bharti’s ARPU might inch approximately Rs 284 by the end of this fiscal, with another round of toll trek anticipated in December 2025, Goldman added. By FY27, ARPU is anticipated to cross Rs 297 for Airtel, taking it closer to the company’s mentioned objective of having an ARPU of over Rs 300.

Airtel’s ARPU Projection

At the same time, rival Reliance Jio’s ARPU growth is expected to grow at a slower rate over the duration, according to Goldmand, which fixes the Mukesh Ambani-owned market leader’s metric to reach Rs 217 by the end of FY26, and Rs 226 in FY27.

Airtel’s India mobile capex, which had seen an unforeseen material increase in the March quarter, was down 51% sequentially in the quarter ended June, bring about a document FCF generation of $1.6 billion, stated Macquarie Resources in a report.

Capex Decrease and FCF Generation

That claimed, Goldman Sachs does not anticipate a brand-new capex cycle for the next 4-5 years, and therefore anticipates strong FCF generation to proceed, forecasting a 22% intensified development in FCF over FY25-FY30, in spite of resumption of AGR settlements starting FY26.

The second biggest telco taped a 2.1% consecutive development in average income per user (ARPU)– key efficiency statistics– as a result of an extra day in the quarter, while it expanded 19% on-year due to the effect of the previous tariff walk and improving customer mix, Goldman Sachs claimed.

A sharp decline in capital investment is driving robust cost-free capital (FCF) generation and deleveraging for Bharti Airtel which might help drive positive beliefs around the company’s supply, analysts said. India’s 2nd largest telco also holds the highest possible average earnings per user (ARPU) in the market at Rs 250, which is anticipated to expand even more by the end of the monetary to over Rs 280 by end.

Market Share and Revenue

Market trackers additionally expect Airtel’s income market share gain to proceed. Revenue share for Airtel was up 200 basis points on-year at 41.8%, which is expected to increase better for both Airtel and Jio because of continued pressure on Vodafone Idea’s FCF.

“With our expectation of a decrease in capex strength paired with the effect from higher tolls, we anticipate a 19%+ FY25-27E FCF CAGR. We anticipate this to equate right into enhancing shareholder payout and projection 50% payout ratio at the consolidated degree,” Goldman Sachs included.