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Photo: Pradeep Gaur/Mint
Photo: Pradeep Gaur/Mint

Bharti Airtel sees demand for home broadband surge during lockdown

  • The company net added around 63,000 users to its home broadband services in January-March
  • Airtel also saw 2% increase in its average revenue per user from the service to Rs803

NEW DELHI : Bharti Airtel Ltd has seen a surge in demand for home broadband services in the last few weeks as the country went into a lockdown to curb the spread of covid-19, forcing people to work from home, the company’s management said in an investor conference call on Tuesday.

“We are excited about home broadband. India is an underserved market and there is a very big opportunity to expand home broadband on a structural basis. Having said that, we are seeing a massive surge in latent demand for home broadband... and even during the lockdown there has been a lot of demand to actually get home broadband going," Bharti Airtel India and South Asia chief executive officer and managing Gopal Vittal said.

The company net added around 63,000 users to its home broadband services in January-March, which Vittal said is one of the highest in many quarters. The Delhi-based telecom operator also saw 2% increase in its average revenue per user from the service to 803.

Bharti Airtel late Monday had posted a loss of 5,237 crore in January-March, its fourth successive quarterly loss, as the company had to take a one-time charge of 7,004 crore on account of a Supreme Court judgement.

However, its consolidated revenue jumped 15% year-on-year to 23,722 crore, helped by a tariff hike in December, with its India mobile revenue growing 22%. The company increased tariffs by as much as 40% in December and raised the minimum monthly recharge for prepaid users to 45.

The positive impact of the tariff hike was such that the core business posted earnings before interest and tax (Ebit) of 26.5 crore, a major silver lining considering that it has been bleeding on an operational basis for a few quarters.

Positive news of the earnings helped the company’s stock soar 11% on the National Stock Exchange to end at 598.80 on Tuesday.

However, Vittal said that while the tariff hike helped the company repair the damages from the over three-year-old price war, more still needs to be done as tariffs are still unsustainably low.

“We believe that an ARPU of 154 is inadequate to turn a reasonable Return on Capital as a company and remain hopeful that ARPUs will get to 200 in the short term and eventually to 300 which is where it should be for a business like ours. Of course, even at this level of ARPU we believe we will be very well placed to serve all the lower end customers who may have the capacity to pay 100 or less," Vittal said.

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