Bharti Airtel Ltd Partly Paidup Q1 FY2026 Concall Summary

Key Takeaways

• B2B retooling, not retreat: Revenue dipped as guided from shedding low-margin wholesale, but underlying B2B grew 2% QoQ and management is placing a disproportionate bet on Cloud, security and software to reshape the enterprise mix.
• India mobile margin hits 51.4%: EBITDAaL margin improved 65 bps sequentially on disciplined capex and operational efficiency, even as ARPU of ₹250 got a one-day tailwind.
• Home broadband is the new battleground: A record 939,000 net adds, with management singularly focused on winning the Wi-Fi game through fiber and FWA combined.
• The Cloud and software platform ambition is now public: Airtel Cloud launched, software deals won with Singtel and Globe, and management believes this can "truly change the composition" of the company.
• What to watch next quarter: Whether broadband momentum accelerates as promised, any sign of churn improvement from transport fixes, and the pace of customer additions on the new Cloud platform.

B2B Portfolio Retooling

• Revenue dip was deliberate: Consolidated revenue of ₹49,463 Crores was impacted by the discontinuation of commoditized, low-margin wholesale and messaging revenue, a move telegraphed in prior guidance. Underlying B2B revenue grew 2% sequentially once that clean-up is stripped out.
• Five segments, three margin profiles: Connectivity (market growth slowed to 4-5%, margins very good), IoT (60% market share, fast growing, margins very good), and Cloud (own platform, margins very good, modular capex) are the bright spots. Wholesale/messaging carries low margins and is being exited at the bottom. Security is a partnership play with low capex but also low margins.
• IoT is riding a utility upgrade wave: Growth is driven by a massive fit-out of smart electricity meters, DISCOM infrastructure upgrades, and opportunities in auto and fleet tracking.
• Digital adjacencies now growing at 23%: The bulk of incremental B2B industry growth sits in cybersecurity, IoT and Cloud, not connectivity.
• Early green shoots in global business: Multiple deal wins in IoT and security were cited, alongside a strong funnel and order book.
• Management time follows the opportunity: The CEO is putting disproportionate time into the B2B side because of the retooling underway, calling the growth opportunity "very high."

Gopal Vittal: "I am putting disproportionate amount of my time in that side of the portfolio because there is a lot of retooling that is happening as we speak... the opportunity for growth is very high there."

Cloud & Software: The New Growth Vector

• Airtel Cloud launched as a homegrown platform: Built by the in-house engineering group on open-source software, it operates at 140 crore transactions per minute, handles over 250 petabytes across 10,000+ servers, 14 large data centers and 120 edge locations. Management calls it the largest Cloud instance for an individual company in India.
• Software platform wins outside the group: Deals signed with Singtel and Globe Telecom in the Philippines, neither part of the Bharti group. Platforms have also been extended to Airtel Africa, Indus Towers and Airtel Payments Bank. Deals described as multi-million dollar, five-year contracts.
• The margin and capex profile is attractive: Software carries "very, very good" margins with barely any capex, requiring only some managed services for integration. Cloud capex is modular: two regions are already running with enough headroom, and new capacity can be installed in three to six months if needed.
• A new selling motion is needed: The company is working on how to ratchet up go-to-market capabilities, acknowledging it has never done this kind of software selling before, having historically sold connectivity and messaging. Conversations are underway with 30 to 40 telcos.
• The ambition is transformational: Management believes the Cloud and software platform business can change the composition of Airtel B2B and even Airtel broadly in the years to come.

Gopal Vittal: "I believe the launch of the Cloud and software platform business can truly change the composition of Airtel B2B and broadly, even Airtel, in the years to come."

Home Broadband: Winning the Wi-Fi Game

• Record quarterly net adds of 939,000: Momentum is strong across both fiber and FWA, with FWA contributing 5.4 lakh net adds. July has been better than June, and management expects continued acceleration.
• The singular metric is Wi-Fi, not the technology: Management is agnostic about whether a home connects via fiber or FWA. The stated goal is winning the Wi-Fi game, whichever way the connection comes.
• Fiber home passes are ramping: The target is to step up from a quarterly run rate of 0.16 crore home passes to 0.25 crore. Fiber homes connecting through fiber saw ratcheted-up growth in Q1.
• Home capex intensity is CPE-driven: The roughly 85% capex intensity in the home segment goes primarily into customer premises equipment (both wired and wireless FWA), FTTH rollout, and fiber rollout, which splits between a common backbone and dedicated last-mile fiber to homes.
• Churn needs work: Management is not happy with some experience issues related to transport hygiene and infrastructure. Churn remains industry-beating but needs improvement, and work is underway to fix it.

Gopal Vittal: "We are not fussed about not winning on FWA, we are fussed about winning on Wi-Fi. I think, that is our singular metric that we want to chase. Whichever way it comes, we want to win the Wi-Fi game."

Mobile: ARPU Levers Without Tariff Repair

• ARPU of ₹250 got a one-day tailwind: The quarter benefited from one extra day and continued underlying mix improvement. The intrinsic ARPU for Bharti Hexacom, excluding roaming pass-through, is ₹246.
• Four structural ARPU drivers remain intact: Feature phone to smartphone upgrades (7-7.5 crore feature phones ready), prepaid to postpaid upgrades (9 crore credit-approved users eligible), data monetization, and international roaming, where penetration is still "abysmally low."
• Contextual ancillary revenue is the new lever: Without headline tariff changes, ARPU growth comes from ancillary revenue attached to the mobile connection that is contextual to the customer, timed to the next best action.
• Tariff architecture remains a frustration: Management pointed to Indonesia's more sensible architecture, where those who can afford to pay more do so without pain to low-end customers, as a model India lacks.
• Rural expansion is shifting to sweating assets: Over 43,500 sites were deployed in the last three years. Several sites have low utilization, and actions are underway to sweat and redeploy where sites may not be making sense. Site additions this quarter hit a probable five-year low.

Soumen Ray: "The more contextual I can make it, the more timing is appropriate for the next best action for that customer, the ARPU will keep growing up because headline tariff if it is not changing, what is changing is ancillary revenue attached to our mobile connection, which is contextual to our customer."

Digital Services & Partnerships

• Perplexity partnership crossed 0.5 crore customers: Engagement was strong within days of launch and is growing daily. The service is free for one year, after which customers decide whether to continue commercially. Economics are at "very marginal cost" to Airtel, though specifics were not disclosed.
• Google One storage bundled: All postpaid and Wi-Fi customers get six months of 100GB Google One cloud storage at no extra cost, positioned as introducing customers to new-age tools rather than direct monetization.
• Anti-spam solution now blocks malicious websites: An enhancement to the industry-first solution now detects and blocks malicious websites across all communication OTT apps, browsers and emails in real time. Over 4,200 crore spam calls have been identified since launch.
• Airtel Finance is scaling: Loan disbursements and credit card issuance are accelerating through partnerships with several NBFCs integrated into Airtel Thanks. The Bajaj Finance EMI card has been lit up across digital interfaces and stores.
• Payments Bank at a ₹3,100 Crore revenue run rate: Monthly transacting users reached 9.8 crore, with revenue growing 27% YoY and deposits up 29% YoY to roughly ₹3,750 Crores.

Soumen Ray: "It is about the fact that Bharti Hexacom, as a company, through the Airtel mobility brand, is trying to bring new experiences to its customer for them to try. We have not said we will give Perplexity free for the whole life, it is for a year and people get a chance to experience it and then they decide whether they want it or not."

Capital Allocation & Balance Sheet

• A billion dollars of senior notes redeemed: India net debt to EBITDAaL now stands at 1.3, and Crisil upgraded the company's credit rating.
• Dividends will directionally increase: The dividend has already been increased this year, and management will "certainly look to step up dividend over the years," with the Board deciding the payout ratio while considering future liabilities.
• M&A focus is on adjacencies: Active work is happening behind the scenes to identify opportunities in Cloud, security and data centers, though nothing has fructified yet.
• Data center listing is a multi-year possibility: The entity can grow to 3x on topline and EBITDA in the next two to three years, with a possible listing over the coming years. Management stressed "no hurry, no mandate, no anxiety."
• Multiple monetization paths under consideration: An InvIT structure for fiber is a three-to-five-year journey. Indus Towers intervention should wait for markets to stabilize, "maybe a few more years down the line." Airtel Money is keen to list, though the timeline is uncertain. Airtel Payments Bank must list under RBI guidelines within the next two to three years.

Harjeet Kohli: "We can continue to grow to 3x growth on the topline and in the EBITDA in the next two-three years and have possibly a listing of the data center entity over the coming years. No hurry, no mandate, no anxiety."

Guidance & Commitments

Key Metrics