Bharti Hexacom Limited — Q3 FY26 earnings call

You would recollect that in the last quarter, we had called out that there were some issues because of which we had some customer drop; whilst we are working very closely with the other partner to see that it gets resolved, it has not yet got resolved completely, and hence there is a bit of drag which we still have on that. Now, your interpretation is absolutely right that during winters, certainly Rajasthan, I do not know so much about Northeast but certainly, Rajasthan is a destination where there are a lot of national inroamers and thereby it generates revenue. I have not checked with other, let us say, somebody like travel portal or anybody, but let me put it this way, Sanjesh. We are focused on how the people who are in the state in these two circles, how do we improve their ARPU and their penetration and over there, we have a challenge; as I mentioned, last quarter the challenge started, the challenge is not yet solved, but there is absolute alignment between the two partners to solve it. Inroamers is something which is beyond our control; it is based on whether people want to go to deserts or to mountains, but I can tell you underlying growth, give or take 20-30 basis points here or there, BHL is trending with the national average and you will see results coming in; one quarter aberration, and primarily because of this interference is what is coloring the picture.

Addresses a key concern about Hexacom's growth lagging Airtel, attributing it to specific operational issues and external factors like 'inroamers' and 'interference'.

Asked by Sanjesh Jain

Well, Sanjesh, certain data sets basis which we size out the market, which is a statistical model, data is not available on a state-cut level, so I can hazard a guess, but I would say, if you look at India, the number of households is about, give or take, anywhere between 250 to 300 million and we are talking of, in 5 years, India going to 100 million, so assuming it is 250 million households, that is a 40% penetration. Whatever households is there in these two states, we can assume that the penetration will, of course, be lower because this is a national average; these two states have a challenge, which is why directionally their mobile ARPU is also lower, would be a shade below that. As you know, there is a lot of combined strategy which is used and which is helping this Company to a great deal because otherwise, running two circles, we could not run the heft, so strategies are allowing basis national, but I would hazard a guess anywhere between 30% to 35% penetration of households should be something which we can easily aspire to.

Provides a qualitative target for FWA household penetration in Hexacom's circles, linking it to national averages and local market characteristics.

Asked by Sanjesh Jain

You see, any spike is a function of the base, and the very thing that you said, and I explained, that fiber density in these two circles is lower, which is why our homes business was also lower. If you look at pre-FWA and you look at share of homes business on total topline or homes as a percentage of mobile in Airtel versus Hexacom, Hexacom was minuscule... the base was very low, and FWA has done the expansion much more, and hence, because of the small base, you see a increase which is disproportionate in percentage terms compared to what you see in Airtel. There is no other reason than that and it is a direct function of how many customers we acquire and how much stock we carry that is the capex, so there is nothing more to that.

Explains the disproportionately high homes capex in Hexacom due to a low base and aggressive FWA expansion, clarifying it's a function of growth rather than a change in strategy.

Asked by Gaurav Malhotra

So, I will give you two answers, Gaurav. Answer one, as an organization, we want to give home Wi-Fi. Now there are multiple technologies by which you can give home Wi-Fi. According to us, the gold standard is if you give fiber, because that gives you the most consistent delivery and lowest latency. There are two others. The next best is FWA, and the least best is UBR because of interference as you mentioned. We will try everything to deliver and increase our addressable market, so this will be no different. We have to just work out as to where is the demand coming from, and is that wherever that demand is coming from is that a well to do area with a good 5G penetration, as in handset penetration, if it is there then we do not need to think about UBR, we can put FWA and serve that customer, so this is a unique set where we do not want to put a FWA radio because the affordability is not there and 5G handset is not there, but there are a lot of people who want home Wi-Fi, so there again UBR will go, but our sequence of preference is that.

Clarifies Hexacom's technology preference (fiber > FWA > UBR) for home Wi-Fi, but indicates willingness to use UBR in specific scenarios where demand exists and other options are not viable, emphasizing customer need over technology.

Asked by Gaurav Malhotra