Airtel capex to fall sharply as 5G rollout comes to an end

Vittal said for many years the gap between pre paid and post-paid rates has diminished, because post-paid is simply 2 times that of pre-payed– it utilized to be a lot higher. If pre paid rates start going up strongly as in markets like Indonesia, after that telcos will certainly in future aim to increase post-paid costs also as one can pack material, do information rollovers on the post-paid system, he mentioned. Greater post-paid prices normally boost ARPU.

Airtel’s post-paid customer base (leaving out IoT and M2M links) expanded by 590,000 sequentially, marginally less than the run-rate of 750,000 in the previous couple of quarters, partly influenced by toll hikes. The telco’s senior management is unfazed and is counting on updating several top-end prepaid customers to the post-paid platform in the coming quarters.

A strong take-up of Airtel’s 2GB plans– offering unrestricted 5G data– is driving information monetisation and the telco would go level bent on speed up the next round 2G to 4G/5G conversions and even target a possible 80 million top-end pre-paid customers to go post-paid to supplant the following wave of ARPU (typical earnings per customer) growth, he said.

“There’s no reason that we shouldn’t have more than 50 million post-paid customers in the next couple of years as there’s a base of 80 million credit-worthy prepaid users that prepares get on to post-paid where the rates is 2x of prepaid,” said Vittal. Airtel’s post-paid user base stood at a shade over 25 million in Q3FY25.

Bharti Airtel shares closed 3.6% greater at Rs 1,677.80 on the BSE Friday, a day after it reported a nearly six-fold surge in quarterly web revenue, boosted generally by single gains on the consolidation of Indus Towers and July toll increases.

Bharti Airtel’s capital investment is set to lower considerably in FY25 and FY26 following the completion of its 5G rollout. The company intends to increase information money making via its 2GB strategies and transition a substantial number of prepaid individuals to post-paid services for increased ARPU growth.

Moving forward, Airtel’s capex, he said, would largely be carried in reinforcing transport network facilities that is vital to the telco’s mobile, home broadband and B2B (venture) businesses, consisting of data centres.

The Airtel MD claimed if the rate design in India adjustments in future, wherein prepaid prices start moving up as is the case in Indonesia, there clearly is headroom for expanding post-paid prices as a great deal of value, usually, can get supplied (in the post-paid system) using container allocations, information rollovers and content packing.

Vittal claimed Airtel’s 2GB information strategies using limitless 5G had actually been a large draw, driving data monetisation and triggering more consumer upgrades to the next-gen mobile broadband service in the December quarter.

Goldman Sachs claimed Airtel’s solid monetary performance in the 3rd quarter was driven by a sharp healing in customer enhancements– after a decline in 2QFY25– which enhanced wireless income, further aided by the recurring influence of toll walkings taken last July.

On Thursday, Bharti Airtel reported robust mobile broadband customer gains at 6.5 million in the December quarter, driven by a strong energy in 5G enhancements. Vittal, though, declined to expose Airtel’s 5G customer base as of Q3FY25.

Vittal claimed Airtel’s 2GB information strategies using unrestricted 5G had been a big draw, driving data monetisation and motivating even more consumer upgrades to the next-gen mobile broadband service in the December quarter. There were 2 parts to information monetisation, he claimed. “One is from high-end plans that offer unlimited 5G information, while the various other is from low-end strategies where information allowances, usually, often tend to run out, offering us an opportunity to market extra information packs. Both these are in play.”

Bharti Airtel’s annual capital investment will fall dramatically in FY25 and FY26 compared with the document Rs 33,000 crore seen in FY24, as the country’s second-largest telco has ended its 5G rollout and will not be spending extra cash on 4G capability growth going forward, its vice-chairman and managing director Gopal Vittal stated.

Vittal said over the years the space between pre paid and post-paid rates has actually shrunk, in that post-paid is just 2 times that of pre-payed– it used to be much higher. If pre paid rates start moving up strongly as in markets like Indonesia, then telcos will certainly in future appearance to increase post-paid costs as well as one can pack web content, do data rollovers on the post-paid platform, he directed out. Higher post-paid rates generally enhance ARPU.

“Airtel’s capex as a portion of profits will trend downwards from FY25 and quickly go to the level of worldwide peers … this is given that our radio (network) capex has slowed down very substantially, and will continue slowing down following year with the conclusion of the large rollouts, and we’re additionally not putting any type of investments in 4G capability,” Vittal stated at the Sunil Mittal-led telco’s fiscal third-quarter earnings phone call Friday.