Bharti Airtel Limited — Q4 FY25 earnings call

Call held 14 May 2025

Management summary

Bharti Airtel reported a strong Q4 and full-year FY25 performance, driven by robust subscriber additions, ARPU stability, and margin expansion in India. The company continued its 5G rollout, fiber deployment, and deleveraging efforts. Strategic focus remains on winning quality customers, enhancing digital capabilities, and optimizing costs, with a clear intent to improve tariff structures in the future.

Highlights

  • Consolidated revenues for FY25 were under ₹173,000 Crores, impacted by Africa currency devaluation.

  • Q4 FY25 consolidated revenues stood at ₹47,876 Crores.

  • India EBITDAaL margin for Q4 FY25 was 50.7%, an improvement of 1.4%.

  • ARPU for Q4 FY25 was ₹245, with an equal day basis ARPU of ₹248.

  • Mobile business added 5 million customers and 0.6 million postpaid net adds in Q4 FY25.

  • Broadband segment added 8.1 lakh customers and rolled out over two million FTTH home passes.

  • Payments Bank annualized revenue run rate reached ₹2900 Crores, growing 35% YoY.

  • FY25 India capex was approximately ₹30,270 Crores, lower than FY24 as guided.

Concerns

  • Low India mobile tariffs and broken tariff structure

Key financials

3 periods

Headline

  • Payments Bank Annualized Revenue Run Rate
    ₹2,900 Cr
    YoY +35%

Q4

  • Consolidated Revenues
    ₹47,876 Cr
  • India Revenues ex-Indus
    ₹33,100 Cr
  • India EBITDAaL Margin
    50.7%
    QoQ +1.4%
  • ARPU
    ₹245
    QoQ 0%
  • Africa EBITDAaL
    ₹4,085 Cr
  • Africa EBITDAaL Margin
    35.9%

FY25

  • Consolidated Revenues
    ₹1.73L Cr
  • India Revenue ex-Indus Growth
    15.3%
    YoY +15.3%
  • India EBITDAaL ex-Indus Growth
    20.2%
    YoY +20.2%
  • India EBITDAaL Margin
    48%

What they filed

Q1 FY27: revenue up 18.3%, net profit up 34.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue41,473 45,129 47,876 49,463 52,145 +26%53,982 +20%55,383 +16%58,539 +18%
EBITDA21,846 24,597 27,009 27,839 29,561 +35%30,783 +25%31,492 +17%33,303 +20%
Net profit4,153 16,135 12,476 7,422 8,651 +108%8,503 −47%9,247 −26%10,012 +35%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Africa
    24% Share of Revenues3.5% Underlying Constant Currency Revenue Growth (Q4)6.3% Reported Revenue Growth (Q4)0.9 Net Debt to EBITDAaL
  • India Mobile
    56% Share of Revenues5 Mn Customers Added (Q4)6.6 Mn Smartphone Data Customers Added (Q4)0.6 Mn Postpaid Net Adds (Q4)135 Mn 5G Customers
  • India Non-Mobile
    14% Share of Revenues
  • Indus Towers
    7% Share of Revenues
  • Broadband
    0.81 Mn Customers Added (Q4)2 Mn FTTH Home Passes Rolled Out (Q4)
  • Digital TV
    76,000 customers Customers Added (Q4)
  • Airtel Business
    ₹5,316 Cr Revenue (Q4)
  • Payments Bank
    96 Mn Monthly Transacting Users10% Monthly Transacting Users Growth (QoQ)₹3,600 Cr Deposits30% Deposits Growth (YoY)

Capital allocation

high confidence
  • Capex ₹30,270 Cr Cut — lower than 2024, as guided
    • Network expansion (5G, fiber)
    • Airtel Business (Cloud, data centers)
    • Fiber deployment (7.2 million home passes added)
    India capex for the year was about 30,270 Crores. This was lower than 2024, as we had guided.
  • Debt 1.5× EBITDA
    • Repayment Prepaid entire high cost DoT debt from past spectrum auctions ₹42,000 Cr
    • Repayment Prepaid another tranche of high cost DoT spectrum debt in Q4 ₹5,985 Cr
    India net debt to EBITDAAL now stands at 1.5.
  • Dividend ₹16/share (interim)
    Airtel, as you know, has announced a big stepped up dividend and so, we will expect this trend to continue. So the reason I am giving you a slightly longer answer is we want complete flexibility on the use of cash. It will always be in the best interest of the company and as you know, both the promoter group and the management has shown solid leadership in managing difficult years of financial situation where many competitors struggle. So, you will have to leave this to our judgement to use the way cash is deployed in the right way. We will manage this through balancing debt, dividends, buybacks, and some investments wherever needed. That is something that we would like to assure you, Piyush.
  • M&A Airtel Africa Acquisition · Ongoing

    Opportunity to buy more stake in a growing asset, good foreign exchange hedge.

    Last block was at about 132 pence and now, it is at 170 odd pence, which gives us good foreign exchange hedge.

    On Africa, I want to give you a little bit of a background. If you recall, we were forced to sell down in the past due to cash flow issues and the fact is Africa is growing solidly and even more than India, it is almost a 2x in terms of growth and you will appreciate that all companies need growth and here we have got one nicely set up in a large set of 14 countries. This is a big, big advantage. So we will take more and back it if we believe in it. All our buying has been at good value, our last block was at about 132 pence and now, it is at 170 odd pence, which gives us good foreign exchange hedge. The asset is in pounds even though underlying currencies are volatile, but reported growth is also at 15%. It is solid, it is also dividend paying and therefore we will look at opportunities to buy more.
  • Liquidity Liquidity disclosed Operating free cash flow, which is really EBITDAAL minus capex, was solid at just under 31,400 Crores.
    Operating free cash flow, which is really EBITDAAL minus capex, was solid at just under 31,400 Crores.

Guidance & targets

Capex

  • FY26 Capex Capex · FY26 · High confidence lower than FY2025
    I want to reiterate that our FY2026 capex will be lower than FY2025, as we have done a lot of heavy lifting over the last two years.

    — Gopal Vittal

Broadband

  • Home Passes Added per quarter Broadband · next quarter and beyond · High confidence over 2.5 million

    Previously 1.7 million → over 2.5 million

    I am not happy with the 1.7 million home passes that we did in the quarter. I would like to see it going up to well over 2.5.

    — Gopal Vittal

Data Center

  • Capacity Doubling Data Center · three years · High confidence double capacity
    on the data center, you seem to be very confident and I think there was some release that we are looking to double the data center capacity in three years. Can you elaborate on that please? ... Yes, we are on track on that programme.

    — Gopal Vittal

  • Capacity Creation Data Center · next 18 months · High confidence substantial amount of capacity
    We are going to have a substantial amount of capacity that will be created in the next 18 months, which is all in the stage of build.

    — Gopal Vittal

Mobile

  • Postpaid Net Adds Mobile · coming quarters · Medium confidence step up

    From 0.6 million today

    My own sense is that the last two quarters we have been trending at about 600,000 postpaid net adds, the reason has been the increase or the repair in tariff that happened across the industry, also on postpaid and while this has now settled down, I believe that actually they should step up in the coming quarters.

    — Gopal Vittal

DTH

  • Broadband Home Penetration DTH · next five years · Medium confidence 75 to 80 million

    From 46 million today

    We are potentially talking over the next five years of broadband homes getting to maybe 75 to 80 million.

    — Gopal Vittal

Tariff Structure

  • Entry Level Pricing Tariff Structure · future · Medium confidence not go up
    The entry level pricing on the plans, I think those entry level pricing should potentially not go up and even if they do, they go up very, very modestly but the next level pricing where there is oodles of data allowance that is put in there, the data allowance should dramatically reduce and then there should be a reason for people to upgrade to higher plan.

    — Gopal Vittal

What to watch in Q1 FY26

FY26 Capex Trend

FY26
Current ₹30,270 Crores (FY25)
Target lower than FY2025

Why it matters

To assess the company's capital efficiency and deleveraging efforts post-5G rollout peak.

I want to reiterate that our FY2026 capex will be lower than FY2025, as we have done a lot of heavy lifting over the last two years.

Risks & concerns

  • Low India mobile tariffs and broken tariff structure

    high

    India mobile tariffs remain among the lowest globally, and the current one-size-fits-all pricing model is deemed broken, needing repair for financial health.

    Management acknowledged

  • Africa currency devaluation

    medium

    Africa currency devaluation impacted consolidated revenues during most of FY25, though Naira has steadied.

    Management acknowledged

  • DTH industry headwinds and regulatory challenges

    medium

    DTH business faces technology disruption, adverse regulatory posture, and competition from free services like Doordarshan.

    Management acknowledged

  • 5G rollout costs impacting margins

    low

    Company absorbed full 5G costs and continued network expansion while still expanding EBITDAaL margins.

    Management acknowledged

  • Pressure on B2B wholesale and commodity segments

    low

    The wholesale and commodity side of the B2B business continues to be under pressure, leading to a strategic shift away from commoditized low-margin businesses.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
Capital allocation strategy for surplus cash (Africa/Indus stake, dividend, capex) Direct
We will manage this through balancing debt, dividends, buybacks, and some investments wherever needed. That is something that we would like to assure you, Piyush.

Analyst probed on specific capital allocation priorities, and management emphasized flexibility and strategic deployment across debt reduction, dividends, buybacks, and growth investments.

Asked by Piyush Choudhary

Formalization of dividend policy and future capex trends Partial
We are not announcing any specific policy in addition to that. The free cash that is actually generated within the company, we will use in the best way possible through a combination of deleveraging dividends as well as additional investments wherever growth can be had.

Analyst sought clarity on a formal dividend policy, which management declined to provide, reiterating a flexible approach to capital deployment.

Asked by Gaurav Malhotra

5G SA transition timeline and strategy Direct
As far as fixed wireless access is concerned, there is an advantage in potentially using SA in order to improve the uplink performance and that is something that we are looking at. You must know that at this point, our networks on 5G are pretty empty and so we have a lot of headroom for uplink, but at some point in time, probably the first port of call will be to move SA on fixed wireless access and then finally to get it to mobile.

Analyst questioned the 5G SA rollout, and management clarified their phased approach, prioritizing FWA for SA initially, and emphasizing experience over technology for technology's sake.

Asked by Gaurav Malhotra

Free cash flow deployment and AGR conversion Direct
On the AGR conversion, I think for us, it was quite simple. We think that we just wanted a non-discriminatory level playing field in terms of an option to convert, whether we will convert or not is a decision for the Board to take, but the option is something that we wanted a clarification from the government whether we had the option or not.

Analyst asked about the company's stance on AGR conversion, and management clarified their objective was to secure the option for a level playing field, leaving the final decision to the Board.

Asked by Ankur Rudra

Beyond broadband for home services and AI strategy (GPU as a service) Partial
So, while the people who we did onboard, which was potentially about half a million customers, were very sticky customers, but the fact is that it was very low ARPU and a huge amount of effort that was taken within the company. So, we have decided to actually go a little slow on that side of the adjacencies and the reason we are going a little slow is that at this point in time, our single minded dedicated focus is to capture a disproportionate share of home broadband.

Analyst probed on expanding home services beyond broadband and the AI strategy. Management indicated a strategic slowdown in low-ARPU adjacencies to focus on core broadband growth and a cautious approach to GPU-as-a-service due to market volatility.

Asked by Sanjesh Jain

Impact of Vodafone Idea's 5G launch on postpaid additions and market share Evasive
I do not want to comment on what our competitors are doing. I think that the way I would see it is that as far as postpaid is concerned, we have added about 600,000 net adds this quarter. I see no reason why that should not actually step up because the number of high value users on our platform is still a large number and prepaid to postpaid could be a very, very important driver of growth.

Analyst asked about competitive impact, which management sidestepped by focusing on their own postpaid growth and drivers, without directly addressing the competitor's entry.

Asked by Kunal Vora

Future of DTH business given IPTV and subsidies Direct
My own view is that there will still be an opportunity for DTH because home broadband will not get to every single home in India, there are 260 - 270 million homes. There will be probably 150 - 160 million TV homes. We are potentially talking over the next five years of broadband homes getting to maybe 75 to 80 million. So, there will still be a large pool of homes served for linear broadcast television, which is where DTH will play a role and there is still an opportunity to grow from cable.

Analyst questioned the long-term viability of DTH. Management acknowledged headwinds but highlighted the remaining market opportunity for linear TV and their strategy to remove subsidies to improve cash flows.

Asked by Kunal Vora

Tariff architecture for future growth Direct
The entry level pricing on the plans, I think those entry level pricing should potentially not go up and even if they do, they go up very, very modestly but the next level pricing where there is oodles of data allowance that is put in there, the data allowance should dramatically reduce and then there should be a reason for people to upgrade to higher plan.

Analyst asked about the future tariff structure. Management outlined a strategy of maintaining entry-level prices while reducing data allowances on higher plans to encourage upgrades, aiming for a stratified pricing model.

Asked by Aliasgar Shakir

3 min read 8 chapters

Detailed narrative

FY25 and Q4 FY25 Financial Performance Overview

Bharti Airtel delivered another year of strong performance in FY25, with consolidated revenues under ₹173,000 Crores, though impacted by Africa currency devaluation. EBITDA after FLO and lease obligations grew by 21.2% with a 2.3% margin improvement. India revenue (ex-Indus) grew 15.3% and EBITDAaL (ex-Indus) grew 20.2%, with margins at 48%. For Q4 FY25, consolidated revenues were ₹47,876 Crores, and India EBITDAaL margins reached 50.7%, an improvement of 1.4% sequentially.

Strategic Priorities and Execution

The company's strategy focuses on building a diversified and resilient portfolio, winning quality customers, delivering brilliant customer experience, leveraging digital capabilities, and war on waste. They are expanding market presence in broadband with FTTH and FWA, enhancing content offerings, and accelerating channel expansion. In mobile, the focus is on postpaid, smartphone upgrades, and international roaming penetration. Network expansion included 19,858 new sites and 44,400 km of fiber deployed in FY25.

Mobile Business Growth and ARPU

In Q4 FY25, the mobile business added 5 million customers and 6.6 million smartphone data customers. Postpaid net adds remained steady at 0.6 million. ARPU for the quarter was ₹245, flat sequentially, but ₹248 on an equal day basis. The company now has 135 million 5G customers, with 5G devices representing 85% of total smartphone shipments. Management believes key ARPU drivers like smartphone upgradation and data monetization remain intact.

Broadband and Digital TV Segment Performance

The broadband segment added 8.1 lakh customers and rolled out over two million FTTH home passes in Q4. The company strengthened its content offering with exclusive partnerships for Apple TV and Apple Music. Digital TV added 76,000 customers, aided by the IPTV launch, and is undergoing structural changes to eliminate subsidies. Management sees significant growth opportunity in broadband, estimating the industry to grow to 80-90 million homes from the current 46 million.

Airtel Business and Digital Businesses

Airtel Business reported revenue of ₹5316 Crores in Q4, with sequential decline attributed to a strategic shift away from commoditized low-margin businesses. The underlying business continues to see traction, landing two subsea cables (SEA-ME-WE 6 and 2Africa Pearls). Digital businesses, including Cloud, Cybersecurity, Financial Services, IoT, and CPaaS, are receiving additional investments. Airtel Payments Bank's monthly transacting users reached 96 million, growing 10% sequentially, with an annualized revenue run rate of ₹2900 Crores, up 35% YoY.

Capital Expenditure and Debt Management

India capex for FY25 was about ₹30,270 Crores, lower than FY24. The company prepaid ₹42,000 Crores of high-cost DoT debt from past spectrum auctions over the last two years, including ₹5985 Crores in Q4. India's net debt to EBITDAaL stands at 1.5. Management expects FY26 capex to be lower than FY25, with a moderation in radio rollout but continued investment in fiber and other strategic areas. They are committed to deleveraging and increasing dividends.

Tariff Structure and ARPU Improvement

Management reiterated that India's mobile tariffs are among the lowest globally and need further repair, describing the current one-size-fits-all pricing model as broken. They envision a stratified tariff architecture where entry-level pricing remains stable, but data allowances on higher plans are reduced to encourage upgrades. This approach is deemed essential for improving financial health and sustaining future investments, aiming for a structure where the highest price is 2.5 times the entry price, similar to other markets.

ESG Initiatives and Operational Efficiency

Bharti Airtel is advancing its ESG agenda, including collaboration with Nokia on Green 5G and using AI/ML for energy efficiency in the radio network. Nxtra, India's first data center to deploy AI, has increased asset life and reduced non-IT power consumption by 10%. The company has solarized over 30,708 sites. In FY25, they saved over ₹2200 Crores in network opex through their 'war on waste' initiative, demonstrating a continuous focus on operational excellence.

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