Bharti Airtel Misses Profit Forecast as Network Costs Climb 11 per Cent
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Bharti Airtel reported a second-quarter consolidated net profit of 88.88 billion rupees, equivalent to 940.45 million dollars, missing market expectations as network operating expenses rose.
Consensus estimates compiled by LSEG projected net profit at 96.73 billion rupees for the three months ended September 30, even as total revenue increased 16.7 per cent to 608.78 billion rupees.
Network costs jumped 11 per cent during the period, driven by the maintenance and operation of telecom infrastructure across the country. Licence fees climbed 13 per cent, pushing total quarterly expenses up approximately 15 per cent to 259.32 billion rupees. Consolidated profit nevertheless gained from the 67.92 billion rupees recorded in the corresponding quarter a year prior, though top-line growth could not fully cushion operational inflation.
Tariff Limits and Premium Migration
Average revenue per user increased 6 per cent year-on-year to 271 rupees, keeping Airtel ahead of domestic peers on unit realisations. The metric gained traction as the carrier added 18.8 million customers to its combined 4G and 5G footprint. Without broad-based tariff increases across the Indian market since July 2024, the business leaned on product pruning to lift receipts. Airtel removed several lower-tier prepaid denominations during the quarter, steering entry-level customers toward costlier recharge tiers.
That migration strategy reflects the ceiling facing Indian operators until the next coordinated price adjustment takes place. Relying entirely on organic plan migrations carries friction, particularly as inflation pressures lower-income prepaid consumers. Brokerage Centrum projects an industry-wide tariff increase of 12 to 15 per cent across the next four to five months, an intervention that would directly feed operating margins.
“Network costs jumped 11 per cent during the period, driven by the maintenance and operation of telecom infrastructure across the country.”
The Market Share Contest With Jio
Competition across India remains defined by the pricing environment established since Reliance Jio entered the sector in 2016. Airtel closed the September quarter with an Indian customer base of 498.7 million, up 10.9 per cent year-on-year. That total leaves the operator trailing Jio, which commands 542.4 million subscribers.
For mobile hardware distributors and digital platform operators, the divergence between the two dominant players shapes commercial exposure. Jio continues to capture volume across price-sensitive tiers, while Airtel defends higher-value urban and postpaid accounts through network coverage investments. Maintaining that premium positioning requires elevated capital allocation toward 5G base stations, driving the maintenance overhead that clipped Airtel’s quarterly earnings.
Regional Support From African Operations
International operations provided a counterweight to domestic margin compression. Revenue from Airtel Africa, which spans 14 countries across sub-Saharan Africa and delivers approximately one quarter of total group revenue, advanced 37.6 per cent.
The current operating performance follows a prolonged period of post-auction network rollout across India, where capital spending on 5G spectrum and hardware converted into recurring maintenance obligations. While earlier quarters benefited from initial 5G user migrations, operating expenses have now caught up with network densification.
Market attention now shifts to the timing of broad-based price adjustments, with operators balancing customer retention against the projected 12 to 15 per cent tariff revision expected before the end of the fiscal year.
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