In Q4 FY22, Bharti Airtel’s revenues increased by 22% year on year, while its net profit increased by 165 per cent
In Q4 FY22, Bharti Airtel’s revenues increased by 22% year on year, while its net profit increased by 165 per cent
Bharti Airtel reported quarterly revenues of Rs 31,500 crore in Q4FY22, rising 22.3 per cent from the last quarter.
Strong and consistent performance delivery across portfolios aided the high increase in revenues.
The company’s India business generated Rs 22,500 crore in quarterly revenue, up 22.7 per cent year over year.
Mobile service revenues in India increased by 25.1 per cent year over year, owing to an increase in average revenue per user (ARPU), mainly due to rate increases implemented in late 2021. In Q4FY22, mobile ARPU grew to Rs 178, up from Rs 145 in the last fiscal quarter.
Its consolidated net profit increased by 165 per cent to Rs 2,008 crore in the quarter, compared to Rs 759 crore the year before.
Furthermore, digital television maintained its market position.
Furthermore, 4G consumers increased by 21.5 million years over a year and 5.2 million quarterly, bringing the total number of 4G customers to 200 million, or 62% of the entire customer base, according to Bharti Airtel’s report to the stock exchanges.
It added 7,000 more towers to deliver ubiquitous connectivity and a different network experience during the quarter.
“At Rs 178, Airtel continues to have the highest ARPU. Our Homes and Enterprise businesses continue to grow rapidly, demonstrating the overall strength of our portfolio.
“We were able to repay part of our spectrum commitments ahead of schedule and improve our leverage thanks to our robust balance sheet and cash flows,” said Gopal Vittal, MD and CEO, India & South Asia.
“We remain positive about the prospects for the coming years and believe we are well-positioned as a company for three reasons.”
First, he argued, was its ability to stick to a clear strategy of winning with quality customers and giving them the most pleasing experience possible.
Second, with massive investments in both infrastructure and digital capabilities, it has a future-proofed business model, and third, it has financial discipline backed by a strong focus on governance.
About Bharti Airtel
Airtel is a New Delhi-based Indian multinational telecommunications services corporation. It has offices in 18 countries in South Asia and Africa, and the Channel Islands. Depending on the country of operation, it provides 2G, 4G LTE, 4G+ mobile services, fixed-line broadband, and voice services. Airtel’s VoLTE technology is now available in all Indian telecom circles. It is India’s second-largest and the world’s second-largest mobile network provider. In Millward Brown and WPP plc’s first-ever Brandz ranking, Airtel was ranked India’s second most valuable brand.
Airtel is credited with developing the minutes factory’s low-cost and large volume manufacturing model by outsourcing all of its business processes except marketing, sales, and finance. Several operators have since embraced the method. Ericsson, Huawei, and Nokia Networks provide and maintain Airtel’s equipment, while Amdocs provides IT support. Bharti subsidiaries and ventures like Bharti Infratel and Indus Towers hold transmission towers in India. For the first time, Ericsson agreed to be paid by the minute rather than upfront for installation and maintenance of their equipment, allowing Airtel to provide inexpensive call rates of 1 (1.3 US) per minute.
Sunil Mittal began constructing push-button phones in India in 1984, which he had earlier imported from a Singaporean business, Singtel, to replace the country’s old-fashioned, unwieldy rotary phones. Bharti Telecom Limited was formed, and a technological partnership with Siemens AG of Germany was formed to produce electronic push-button phones. Bharti began producing fax machines, cordless phones, and other telecom equipment in the early 1990s. Mitbrau was the name of his first push-button phone.
He won one of the 4 phone network licences that were auctioned in India in 1992. One of the Delhi cellular licence requirements was that the bidder had prior telecom operator experience. He reached an agreement with Vivendi, a French telecom company, and he was one of the first Indian businessmen to recognise the mobile telecommunications industry as a critical growth sector. When Bharti Cellular Limited (BCL) was created to provide cellular services under the brand name Airtel, the government approved his intentions in 1994, and he began operations in Delhi in 1995.
In just a few years, Bharti became the first telecom provider to reach 2 million mobile subscribers.
Bharti Enterprises bought JT Holdings in 1999 and expanded its cellular operations to Karnataka and Andhra Pradesh. It purchased Chennai-based Skycell Communications in 2000. The business bought Spice Cell in Calcutta in 2001. Bharti Enterprises was listed on the BSE and the NSE of India when it went public in 2002.
In July 2004, Airtel became the first operator in India to launch “Hello Tunes,” a caller ring back tone service (CRBT). The A.R. Rahman-composed Airtel theme song was the year’s most popular music.
In May 2008, it was revealed that Airtel was thinking of purchasing the MTN Group, a South African telecommunications provider with coverage in 21 African and Middle Eastern nations. Bharti is mulling a US$45 billion offer for a 100 per cent stake in MTN, which would be the largest overseas acquisition by an Indian company. Both sides stress the exploratory nature of the talks, with The Economist observing, “If anything, Bharti would be marrying up,” as MTN has more users and more revenue. MTN Group tried to reverse the agreements by making Bharti nearly a new business subsidiary, but the talks fell apart.
In May 2009, Bharti Airtel said it had resumed talks with MTN, and the two companies agreed to explore the potential merger confidentially until July 31, 2009. The talks eventually came to a standstill due to concerns from the South African government, according to some sources.
Bharti negotiated for its strategic partner Alcatel-Lucent to oversee the fixed-line network infrastructure in 2009. Bharti Airtel then granted Alcatel-Lucent a three-year contract to set up an Internet Protocol access network across the country. This would allow people to browse the internet at higher speeds and better quality on their mobile phones.
Airtel established its first international mobile network in Sri Lanka in 2009. Bharti bought Zain Telecom’s African operations for $10.7 billion in June 2010, making it the largest telecom acquisition by an Indian company. Bharti partnered with Wal-Mart, the world’s largest retailer, in 2012 to open several retail locations across India. Bharti wanted to buy Loop Mobile for $7 billion (US$92 million) in 2014. However, the deal fell through.
In the first step of a global rebranding strategy, Airtel relaunched itself in India on November 18, 2010. The corporation debuted a new logo that features the word “airtel” written in lower case. The new logo, designed by London-based brand firm The Brand Union, is a lowercase letter ‘a’ with the word ‘airtel’ written beneath it in lowercase.
Airtel’s Africa operations were renamed ‘airtel’ on November 23, 2010. Sri Lanka followed on November 28, 2010, while Warid Telecom in Bangladesh rebranded to ‘airtel’ on December 20, 2010.
Acquisitions and mergers
MTN Group merger negotiations
In May 2008, Airtel considered purchasing the MTN Group, a South African telecommunications corporation with operations in 21 African and Middle Eastern nations. Bharti is mulling a US$45 billion offer for a 100 per cent stake in MTN, which would be the largest overseas acquisition by an Indian company. Both sides, though, underscored the talks’ fragile nature.
“If anything, Bharti would be marrying up,” according to the Economist, because MTN had more subscribers and higher revenues. MTN Group tried to reverse the agreements by making Bharti nearly a new business subsidiary, but the talks fell apart.
Airtel said it was in talks with MTN again in May 2009, and the two companies agreed to explore the prospective deal exclusively by July 31, 2009. “Bharti Airtel Ltd is glad to announce that it has renewed its efforts for a meaningful relationship with MTN Group,” Airtel stated in a statement. The exclusivity period was twice extended till September 30, 2009. The discussions eventually came to a halt due to a lack of agreement.
As a solution, the new business would be listed on two stock exchanges, one in South Africa and the other in India. Dual-listing of firms is prohibited by Indian law.
Acquisition of Zain’s Africa operations
Bharti bought Zain’s mobile operations in 15 African nations in June 2010, making it India’s second-largest overseas acquisition after Tata Steel’s $13 billion purchase of Corus in 2007. On June 8, 2010, Bharti Airtel completed its $10.7 billion acquisition of the Kuwaiti firm’s African business, making Airtel the world’s fifth-largest wireless network. When compared to the last year, Airtel’s fourth-quarter revenues increased by 53% to US$3.2 billion, with the newly acquired Zain Africa segment contributing US$911 million to the total.
However, due to a US$188 million increase in radio spectrum charges in India and a US$106 million increase in loan interest, net profits fell by 41%, from US$470 million in 2009 to US$291 million in 2010.
Warid Bangladesh and Robi
In 2010, Bharti Airtel paid $300 million for a 70.90 per cent stake in Warid Telecom. The Bangladesh Telecommunication Regulatory Commission approved the agreement on January 4, 2010. Bharti Airtel Limited seized ownership of the company and its board of directors on December 20, 2010, and renamed its services under its own “airtel” brand. In March 2013, Warid Telecom sold its remaining 30% stake to Bharti Airtel’s Singapore-based subsidiary Bharti Airtel Holdings Pte Limited.
Robi Axiata Limited is the licensee of the airtel brand in Bangladesh, and airtel Bangladesh was merged with Robi as a product brand of Robi on November 16, 2016.
Robi is a venture between Malaysian telecom operator Axiata and Bharti Airtel, with Axiata controlling 61.82 per cent and Bharti Airtel 28.18 per cent, respectively.
On August 11, 2010, Bharti Airtel announced that it would purchase a 100% share in Telecom Seychelles for US$62 million, bringing its global reach to 19 nations. Under the Airtel brand, Telecom Seychelles operates 3G, fixed-line, ship-to-shore services, satellite telephony, and value-added services like VSAT and Gateways for International Traffic across Seychelles. The business controls approximately 57 per cent of the Seychelles mobile market. Airtel has announced intentions to invest $10 million over three years in its fixed and mobile telecommunications in Seychelles and participate in the Seychelles East Africa submarine cable (SEAS) project.
Wireless Business Services Private Limited
Airtel announced an agreement to buy a 49 per cent stake in Wireless Business Services Private Limited (WBSPL) for $9.07 billion (US$120 million) on May 24, 2012. WBSPL was a Qualcomm-led venture that possessed the BWA spectrum in the Delhi, Haryana, Kerala, and Mumbai telecom circles. Qualcomm paid $1 billion for the BWA spectrum in those four rings. Airtel now has 4G coverage in 18 circles as a result of the agreement.
On July 4, 2013, Airtel stated that it had bought an extra 2% share capital (bringing its total stake in Qualcomm’s BWA businesses to 51%), effectively making their subsidiaries. On October 18, 2013, Airtel stated that it had purchased 100% of WBSPL’s shares for an unknown value, making it a wholly-owned subsidiary.
In December 2015, Augere Wireless Airtel paid an unknown fee for Augere Wireless Broadband India Private Limited, a business that has a 4G spectrum in the Chhattisgarh-Madhya Pradesh circle. According to the Economic Times, Augere’s spectrum is worth $1.5 billion (US$20 million). The merger of Augere Wireless and Bharti Airtel Limited was finalised on February 16, 2017, according to Airtel.
On January 2, 2017, The Economic Times reported that Airtel and Telenor India were in talks to buy the latter. On February 23, 2017, Airtel announced that it had reached a definitive agreement to buy Telenor. Airtel will buy Telenor India’s assets and customers in all seven of the latter’s telecom circles: Andhra Pradesh, Bihar, Maharashtra, Gujarat, Uttar Pradesh (East), Uttar Pradesh (West), and Assam. The Telenor deal will provide Airtel with a 43.4 MHz spectrum in the 1800 MHz range. According to Business Standard, it was a no-cash agreement that will cost Airtel 1,600 crore over ten years due to spectrum licence fees.
Tikona 4G spectrum
On March 23, 2017, The Economic Times reported that Airtel had paid about 1,600 crores for Tikona Digital Networks Pvt. Ltd’s 4G spectrum. Tikona’s 350 cellular stations in five rings are included in the sale.
Before the agreement, Airtel had no spectrum in the 2300 MHz band in Uttar Pradesh (East), Uttar Pradesh (West), or Rajasthan, and just 10 MHz in Gujarat and Himachal Pradesh. Rajesh Tiwari, a co-founder of Tikona, issued a legal notice to both firms for failing to provide information about the distribution of proceeds among shareholders.
On December 12 2017, Bharti Airtel stated that its Rwandan company had inked an agreement with Millicom to acquire total control of the latter’s Rwandan affiliate, Tigo Rwanda. The transaction was valued at $60-70 million. The company was known as Airtel-Tigo after the merger until January 2020, when it was renamed Airtel Rwanda.
Bharti Airtel stated in October 2017 that it would buy Tata Teleservices, Tata Docomo, and Tata Teleservices Maharashtra Ltd (TTMLconsumer )’s mobile businesses in a debt-free cash-free deal. Airtel will only be responsible for TTSL’s outstanding spectrum payments due to the agreement. TTSL’s enterprise, fixed-line, and broadband businesses and its ownership in tower operator Viom Networks will continue to function. The merger was approved by India’s Competition Commission (CCI) in mid-November 2017.
Bharti Airtel received shareholder approval for its proposed merger with Tata Teleservices on August 29, 2018. The NCLT in Delhi awarded final clearance to the merger of Tata Docomo and Airtel on January 17, 2019. Tata Teleservices’ consumer mobile division was acquired by telecom provider Bharti Airtel on July 1, 2019.
Airtel will take over the mobile consumer activities of Tata Sons’ telco in 19 circles across India—17 under Tata Teleservices and two under Tata Teleservices (Maharashtra) Ltd. Airtel will assume a minor share of Tata Teleservices’ unpaid spectrum liabilities as part of the proposed transaction.
Bharti Airtel will receive an additional 178.5 MHz of spectrum in three bands—1800 MHz, 2100 MHz, and 850 MHz—that are commonly utilised for 4G, which Airtel is growing to keep up with Reliance Jio Infocomm. As of April 2019, Airtel would add roughly 13 million Tata Tele mobile subscribers to its nearly 322 million users. However, according to the regulations, most of Tata Tele’s mobile users are inactive.
Bharti Airtel stated in February 2022 that it has acquired a strategic position in Aqilliz, a blockchain firm, through its “Airtel Startup Accelerator Program.” Singapore-based Aqilliz is a blockchain-enabled MediaTech firm that aims to build a more collaborative digital marketing environment by providing new era middleware technologies for the media marketplace.
Bharti Telecom (BTL) is a Bharti Airtel holding company, with Bharti Enterprises and SingTel owning 50.56 per cent and 49.44 per cent of BTL, respectively Bharti Airtel having 35.80 per cent.
Airtel India is India’s second-largest mobile telephony operator behind Jio and the country’s second-largest fixed telephone provider. It offers broadband and subscription television services. It is led by Sunil Bharti Mittal and delivers telecom services under the Airtel name.
Airtel offers internet leased lines, multiprotocol label switching broadband internet connectivity, and IPTV and telephone services. Bharti supplied fixed-line telephony and broadband services under the Touchtel brand until September 18, 2004. Under the common name Airtel, Bharti now provides all telecom services, including fixed-line services, and offers Telemedia services in 99 places as of June 2019. Airtel had 2.342 million broadband subscribers as of June 30, 2019.
Broadband and IPTV services are provided by Airtel Broadband, and it gives both limited and unlimited download plans. Airtel’s unlimited plans, on the other hand, are subject to a free usage policy (FUP), which reduces speed once a client has over a particular data consumption limit. Airtel gives only 64KByte/second beyond FUP in most plans, comparable to other rivals’ prices. The new V-Fibre programme’s greatest speed available to home users is up to 300 megabits per second, compared to 16 megabits per second with DSL.
According to The Economic Times, the Telemedia business was integrated with the Mobile and DTH businesses in June 2011.
Under the brand name Airtel digital TV, the digital television business delivers India’s direct-to-Home (DTH) TV services. It began operations on October 9, 2008, and at the end of June 2019, it had over 16.027 million customers.
Cloud and managed services, digital signage, Wi-Fi dongles, voice solutions (like toll-free numbers, TracMate, and automated media reading), and conferencing solutions (VoIP, audio, and video) are some of the products by Airtel Business, which cater to industry verticals like BFSI, IT/ITeS, manufacturing, hospitality, and government.
Bharti Airtel’s B2B arm, Airtel Business, has launched a first-of-its-kind specialised digital platform to support emerging enterprises’ expanding connection, communication, and collaboration needs, including SMEs and startups. The digital platform will provide solutions to developing businesses to help them do business more efficiently and get to market faster.
Beetel Teletech Ltd., a subsidiary of Bharti Enterprises Ltd., introduced a $9,999 (US$130) 7-inch tablet based on Google Inc.’s Android operating system in India on August 18, 2011. The plan is to take advantage of the predicted demand for low-cost computing devices in the fastest-growing and second-largest mobile phone market.
Airtel is the world’s third-largest mobile operator by the base, with operations in 17 countries plus the Channel Islands.
Its operational areas include:
The Indian Subcontinent:
- Airtel India, in India
- Airtel Sri Lanka, in Sri Lanka
- Robi, in Bangladesh
Bharti Airtel after Q4 Results | What should investors do with the stock: Buy, sell or hold?
The stock of Bharti Airtel climbed 2% in early trading on May 18, a day after the firm reported its March quarter profits.
Bharti Airtel reported a 165 per cent increase in net profit for the fourth quarter of FY2021-22 to Rs 2,008 crore, up from Rs 759 crore a year ago, helped in part by a more oversized extraordinary item of Rs 906 crore.
The profit increased by 142 per cent from Rs 830 crore earned in October–to December.
Consolidated revenues increased by 22% yearly to Rs 31,500 crore, compared to Rs 25,747 crore in the last quarter.
Revenue increased by 5.5 per cent from the last quarter’s revenue of Rs 29,867 crore.
Following are the opinions of brokerages on the stock and the firm following the March quarter earnings:
Research has kept a ‘buy’ recommendation on the stock with a target price of Rs 880 per share, citing the company’s robust performance in Q4 due to tariff hikes.
FCF creation is good, and 2.5x leverage is acceptable. According to CNBC-TV18, the company expects to generate a 20% EBITDA CAGR over FY22-25, owing to decreased EBITDA predictions by 1-2 per cent due to increased fuel prices.
The brokerage has maintained a buy recommendation on the company with a target price of Rs 855 per share, citing a positive Q4 performance from India wireless and homes, which offsets a weaker Africa.
According to CNBC-TV18, rising ARPU and net additions drive additional market share gains in India’s wireless business.
Bharti Airtel traded at Rs 724.20 on the BSE at 9:17 p.m., up to Rs 16.65, or 2.35 per cent.
Airtel’s Business Model – An in-depth look at how the company produces money.
Airtel exemplifies a successful company strategy for others to emulate, regardless of their industry. Airtel is primarily concerned with two things: client acquisition and retention and business development and expansion. Their vision and mission clearly say that their ultimate aim is to be a worldwide admired telecom service that focuses on customer pleasure and offers innovative, cost-effective services.
What is unique in the business model of Airtel?
Apart from their marketing, sales, finance operations, and the minute’s factory’ model of cheap cost and huge volumes, Airtel believes in outsourcing everything else.
Airtel has highlighted certain critical areas in their business model that they refer to as strategic business pillars. These are they:
1. Focus on Quality customers – Airtel strives to bring value to its consumers in addition to the differentiated services it provides.
2. Creating new revenue streams – The brand assists its non-mobile wings, like Airtel Business, Digital TV, and Broadband offerings, bringing in new verticals.
3. Providing top-of-the-line services – Using cutting-edge infrastructure and powerful automated techniques and technology, Airtel aspires to provide its consumers with the greatest possible network quality.
4. Employee-centric culture – In addition to investing heavily in digital talent, Airtel ensures that every one of its employees is given substantial responsibilities and opportunities to grow with the company.
5. Eco-friendly approach – With the environment in mind, Airtel recommends reducing resource waste and operational costs to the absolute minimum.
Airtel’s business plan is working on future strategies, like introducing innovation to its services, exploring new techniques and products, and providing quality services to its customers to maintain its top position.
What is Airtel’s business model for making money?
All of the products and services mentioned above help Airtel make money. It makes money from customers through a B2C model and aids startups and SMEs through a B2B model registered under Airtel Business. Airtel stands apart because of its unique business approach, which tries to give customers the greatest services at cheap pricing.
It is important to remember that Airtel is not one of the companies that have experienced rapid expansion. Instead, it has established itself as a market leader only through hard work. Furthermore, it is one of the few telecommunications services providers that have realised the importance of value-added services (VAS) right away from the start, which further eased its way.
edited and proofread by nikita sharma