Bharti Airtel’s senior management has outlined its capital expenditure (Capex) strategy during the Q4 FY25 analyst call, with a clear focus on strategic investments in cloud and data centers within its B2B segment.
Capex of Bharti Airtel for 4QFY25 saw an uptick due to the timing of certain shipments and increased investments in wireless infrastructure. However, for the full fiscal year FY25, Bharti Airtel’s Capex in India (excluding Indus Towers) was recorded at INR 303 billion, down from INR 334 billion in FY24, aligning with management’s guidance. The management has indicated that Capex intensity is expected to further moderate in FY26, with radio Capex set to decline as the rural rollout completes.
In FY25, Airtel’s Capex was strategically directed towards enhancing the transport layer, expanding home broadband capabilities, increasing data center capacity, and furthering B2B initiatives. Wireless Capex, however, is expected to decline in FY26 as the rural network expansion concludes, MotilalOswal Research Analysts Aditya Bansal, Siddhesh Chaudhari and Avinash Karumanchi said in a recent report.
The company has earmarked significant investments in data centers, aiming to double its capacity to 400MW over the next three years, capitalizing on its existing 12 percent market share in India’s data center capacity. Additionally, Capex for the Airtel Business segment surged 83 percent YoY to INR 25 billion, as the company ramped up investments in B2B infrastructure.
Bharti Airtel demonstrated robust subscriber growth across key business segments. The 5G user base expanded to 135 million as of Q4 FY25, a notable increase from 120 million QoQ, highlighting strong traction in 5G handset adoption.
The company added 810k users in the Home Broadband segment, with approximately 45-50 percent of these additions driven by Fixed Wireless Access (FWA). This segment now has a subscriber base of 10 million, representing a 32 percent YoY increase. Furthermore, Bharti’s postpaid subscriber base grew by approximately 0.6 million (+2.5 percent QoQ, +12 percent YoY), reflecting the success of its premiumization strategy.
Bharti Airtel’s Home Broadband business continued to gain momentum, adding 810k users in Q4, driven largely by FWA deployments. Despite a slight ARPU decline of 2 percent QoQ to INR 543/month, Homes revenue grew by 6 percent QoQ to INR 16 billion (+21 percent YoY).
Airtel Business experienced a decline in revenue by 6 percent QoQ to INR 53 billion, mainly due to the exit from lower-margin contracts. However, EBITDA surged by 13 percent QoQ to INR 22.4 billion, driven by a favorable product mix and enhanced operational efficiency.
Bharti Airtel is aggressively expanding its data center capacity to 400MW over the next three years, targeting significant growth in enterprise and OTT demand.
The wireless segment added 6.6 million 4G/5G subscribers in Q4, bringing the total to 135 million 5G users. Data consumption per subscriber improved to 25.1 GB/month (+5 percent QoQ).
Bharti Airtel’s consolidated revenue grew by 6 percent QoQ (+27 percent YoY), driven by consolidation of Indus Towers and growth in the Homes and Africa segments. EBITDA increased by 10 percent QoQ to INR 270 billion (+40 percent YoY), with margins expanding in the B2B segment due to a favorable product mix. Capex intensity, however, surged by 57 percent QoQ to INR 144 billion, primarily due to increased spending on wireless infrastructure, cloud services, and data centers.
With Capex intensity expected to moderate in FY26 and radio investments tapering off, Bharti Airtel is poised to generate substantial Free Cash Flow (FCF) of approximately INR 1 trillion over FY26-27E. The focus on data centers and B2B infrastructure, combined with strategic investments in broadband and transport networks, positions Airtel to capture emerging growth opportunities in the enterprise segment.
Further, the expansion of its 5G subscriber base and increased penetration of home broadband services are likely to sustain revenue growth. Management’s prudent approach to Capex allocation underscores a disciplined strategy aimed at enhancing profitability while maintaining market leadership in key segments.
TelecomLead.com News Desk
