‘Airtel expects 4G migration to fuel ARPU growth from Q3’

Bharti Airtel is looking at a one-and-a-half to two-time increase in average revenue per user (ARPU) from the December quarter, driven primarily by its feature-phone users going 4G, amid a limited likely impact from the newly launched JioPhone Next of the Reliance-Google combine, analysts said.

Analysts, though, expect the Sunil Mittal-led telco to pull the plug on its monthly bulk data plans in absence of any meaningful market traction. This is since Airtel’s plans offering daily data allowances – unlike the premium bulk data packs – work out cheaper for consumers.

“From Q3, Bharti Airtel’s management expects ARPU growth trajectory in near term to be driven by 2G-to-4G upgrades as the July 2021 tariff increase has largely flowed through in the 2Q results,” IIFL Securities said in a note seen by ET.

Airtel reported almost 5% sequential growth in ARPU to ₹153 in the July-September period, on the back of segmented tariff hikes taken in July in its base prepaid voice and post-paid corporate user segments.

IIFL expects ARPU growth opportunities for Airtel to come initially via 2G-to-4G user conversions, followed by the telco’s 4G prepaid subscribers going post-paid, with each segmented upgrade capable of potentially resulting in 1.5x-2x ARPU jumps.