Q1 2027 Bharti Airtel Ltd Earnings Call

August 5, 2026

Speaker #2: Good afternoon, ladies and gentlemen. I am Verehi Sharma, the moderator for this webinar. Welcome to the Bharti Airtel Limited and Bharti Hexacom Limited first quarter ended 30 June 2026 earnings webinar.

Moderator: Good afternoon, ladies and gentlemen. I am Vaidehi Sharma, the moderator for this webinar. Welcome to the Bharti Airtel Limited and Bharti Hexacom Limited Q1 ended 30 June 2026 earnings webinar. Present with us today is the senior leadership team of Bharti Airtel and Bharti Hexacom Limited. I must remind you that the overview and discussions today may include certain forward-looking statements that must be viewed in conjunction with the risks that we face. Post the management opening remarks, we will open up for an interactive Q&A session. Interested participants may click on raise hand option on the Zoom application to join the Q&A queue. The participants may also click this option during the management opening remarks itself to ensure they find a place in the queue. Upon announcement of name, participants to kindly click on unmute myself in the pop-up screen and start asking the question post introduction.

Operator: Good afternoon, ladies and gentlemen. I am Vaidehi Sharma, the moderator for this webinar. Welcome to the Bharti Airtel Limited and Bharti Hexacom Limited Q1 ended 30 June 2026 Earnings Webinar. Present with us today is the senior leadership team of Bharti Airtel and Bharti Hexacom Limited. I must remind you that the overview and discussions today may include certain forward-looking statements that must be viewed in conjunction with the risks that we face. Post the management opening remarks, we will open up for an interactive Q&A session.

Speaker #2: Present with us today is the senior leadership team of Bharti Airtel and Bharti Hexacom Limited. I must remind you that the overview and discussions today may include certain forward-looking statements that must be viewed in conjunction with the risks that we face.

Speaker #2: After the management's opening remarks, we will open up for an interactive Q&A session. Interested participants may click on the "Raise Hand" option on the Zoom application to join the Q&A queue.

Operator: Interested participants may click on raise hand option on the Zoom application to join the Q&A queue. The participants may also click this option during the management opening remarks itself to ensure they find a place in the queue. Upon announcement of name, participants to kindly click on unmute myself in the pop-up screen and start asking the question post introduction. With this, I would now like to hand over to Mr. Gopal Vittal for his opening remarks.

Speaker #2: The participants may also click this option during the management opening remarks itself to ensure they find a place in the queue. Upon announcement of name, participants to kindly click on "Unmute Myself" in the pop-up screen and start asking the question post-introduction.

Speaker #2: With this, I would now like to hand over to Mr. Gopal Vittal for his opening remarks.

Moderator: With this, I would now like to hand over to Mr. Gopal Vittal for his opening remarks.

Speaker #3: Good afternoon, everybody, and welcome to the Q1 earnings call. I have with me Shashwath, Sherman, Akhil, and Naval. Let me comment on the overall performance as well as the new bets that we have focused on before I hand over to Shashwath.

Gopal Vittal: Good afternoon, everybody, and welcome to the Q1 earnings call. I have with me Shashwat, Soumen, Akhil, and Naval. Let me comment on the overall performance as well as the new bets that we are focused on before I hand over to Shashwat. We delivered yet another quarter of strong performance across the group. Consolidated revenue was INR 58,500 crore, growing at about 5.7% sequentially. Africa maintained its strong growth trajectory with a constant revenue growth of 5.7%. India, excluding the passive infra growth, was equally strong at 3.6% sequentially. Our consolidated EBITDA was at INR 29,800 crore. This was a growth of 4.2%, and the margin stood at 51%. Our operating free cash flow, which is EBITDA minus CapEx, was at over INR 16,450 crore.

Speaker #3: We delivered yet another quarter of strong performance across the group. Consolidated revenue was ₹58,500 crores, growing at about 5.7% sequentially. Africa maintained its strong growth trajectory, with constant currency revenue growth of 5.7%.

Speaker #3: India, excluding the passive infra growth, was equally strong at 3.6% sequentially. Our consolidated EBITDA was at ₹29,800 crores; this was a growth of 4.2%, and the margin stood at 51%.

Speaker #3: Our operating free cash flow, which is EBITDA minus capex, stood at over ₹16,450 crore. Capex for the quarter was about ₹13,390 crore, and operational discipline continues to remain an enabler of our strong performance.

Gopal Vittal: CapEx for the quarter was about INR 13,390 crore. The operational discipline continues to remain an enabler of our strong performance, with focused execution and efficiency improvements through our war on waste initiative. Our consolidated net debt to EBITDA improved to 0.7. India without passive infra is now lower than 1. The strength of our balance sheet is underpinned by our prudent capital allocation, disciplined CapEx, and continued operational excellence. This is well-recognized by leading global agencies with sustained rating upgrades during the quarter. Our diversified, resilient portfolio continues to deliver strongly. Today, I want to spend a little bit of time on Africa, a market where we see a significant long-term opportunity. During the quarter, we've completed an EPS accretive share swap transaction that increased our Airtel stake in the Africa business to over 79%.

Speaker #3: With the focus on execution and efficiency, improvements through our War on Waste initiative, our consolidated net debt to EBITDA improved to 0.7, and India without passive infra is now lower than 1.

Speaker #3: The strength of our balance sheet is underpinned by our prudent capital allocation, disciplined capex, and continued operational excellence. This is well recognized by leading global agencies, with sustained rating upgrades during the quarter.

Speaker #3: Our diversified, resilient portfolio continues to deliver strongly. Today, I want to spend a little bit of time on Africa, a market where we see significant long-term opportunity.

Speaker #3: During the quarter, we've completed an EPS-accretive share swap transaction that increased our Airtel stake in the Africa business to over 79%. This strengthens our participation in Africa's growing profit pool and underscores our belief in the scale and durability of the opportunity across the continent.

Gopal Vittal: This strengthens our participation in Africa's growing profit pool and underscores our belief in the scale and durability of the opportunity across the continent. We've invested significant time in understanding each market, building local execution capabilities, and developing healthy relationships with regulators and other stakeholders. This experience has also affirmed our decision to introduce Indus into Africa. Airtel Africa operations today generate an annualized EBITDA of over INR 35,000 crore. I truly believe this is a very rare achievement for an Indian-based company. Africa is also, as you know, an important growth engine in Airtel's portfolio, contributing, in the last 1 year, almost half of our consolidated revenue growth of 16% for the year.

Speaker #3: We've invested significant time in understanding each market, building local execution capabilities, and developing healthy relationships with regulators and other stakeholders. This experience has also affirmed our decision to introduce Indus into Africa.

Speaker #3: Airtel's Africa operations today generate an annualized EBITDA of over ₹35,000 crore, and I truly believe this is a very, very rare achievement for an Indian-based company.

Speaker #3: Africa is also an important growth engine in Airtel's portfolio, contributing in the last year almost half of our consolidated revenue growth of 16% for the year.

Speaker #3: Over the last five years, the business has delivered constant currency CAGR growth of over 20% in revenue and over 24% in EBITDA, reflecting both the strength of our execution and the scale of the opportunity.

Gopal Vittal: Over the last 5 years, the business has delivered constant currency CAGR growth of over 20% in revenue and over 24% in EBITDA, reflecting both the strength of our execution and the scale of the opportunity. The structural growth potential is supported by a powerful combination of favorable demographics, low digital penetration, and rising demand for connectivity, financial inclusion, and digital infrastructure. I believe Africa today resembles India nearly 10 years ago. A large, young, and increasingly digital population with meaningful headroom for penetration-led growth. Let me give you a few examples of this just to reinforce this. Teledensity, which is penetration, is at 45%. Smartphone penetration is only 52%, showing you the headroom available. The average median age across the continent in the markets we operate in is under 18 years. The total population across these 14 countries is about 680 million and growing strongly.

Speaker #3: The structural growth potential is supported by a powerful combination of favorable demographics, low digital penetration, and rising demand for connectivity, financial inclusion, and digital infrastructure.

Speaker #3: I believe Africa today resembles India nearly ten years ago—a large, young, and increasingly digital population with meaningful headroom for penetration-led growth. And let me give you a few examples of this, just to reinforce the point.

Speaker #3: Tele-density, which is penetration, is at 45%. And smartphone penetration is only 52%, showing you the headroom available. The average median age across the continent, in the markets we operate in, is under 18 years. The total population across these 14 countries is about 680 million and growing strongly.

Speaker #3: Home broadband penetration is only 2%, and there are at least 30 million households that can afford a broadband connection. The enterprise and data center opportunities remain largely untapped.

Gopal Vittal: Home broadband penetration is only 2%. There are at least 30 million households that can afford a broadband connection. The enterprise and data center opportunities remain largely untapped. We have over 82,000 kilometers of fiber with access to large submarine capacity. Finally, Airtel Money has now achieved meaningful scale with a Q1 revenue of over $400 million, growing at 26% year-on-year in constant currency terms. The opportunity ahead here remains significant with 64% of adults across our footprint still without access to a formal bank account. Given this growth trajectory and the large addressable opportunity, Airtel Money is now preparing for a London listing in H2 2026. We are investing with discipline to capitalize on multi-year opportunities across mobile, across 5G, homes, Airtel Money, B2B, and data centers.

Speaker #3: We have over 82,000 kilometers of fiber, with access to large submarine capacity. And finally, Airtel Money has now achieved meaningful scale with a Q1 revenue of over $400 million.

Speaker #3: Growing at 26% year on year in constant currency terms. The opportunity ahead remains significant, with 64% of adults across our footprint still without access to a formal bank account.

Speaker #3: Given this growth trajectory and the large addressable opportunity, Airtel Money is now preparing for a London listing in the second half of 2026. We're investing with discipline to capitalize on multi-year opportunities across mobile, 5G, homes, Airtel Money, B2B, and data centers.

Speaker #3: And while we're still very early in the homes and B2B segments, our balance sheet gives us the capacity to build a meaningful position in each of these areas.

Gopal Vittal: While we are still very early in homes and B2B segments, our balance sheet gives us the capacity to build a meaningful position in each of these areas. As a group, we've brought significant heft to our Airtel operations in the last 18 months. Benefits now accrue across technology, across network, across supply chain and talent. We operate far more cohesively, translating these efforts into stronger operation execution and operating excellence. We've called out three additional areas for group cohesion. B2B, where both solutions and go-to-market capability is replicated across the continent. On homes, all of the lessons that we've learnt in India are now extended into Africa. Energy efficiency is another key area of focus. We're working with Indus to deploy high energy efficiency power equipment and advanced energy storage solutions aimed at reducing diesel dependence across sites.

Speaker #3: As a group, we've brought significant heft to our Airtel operations in the last 18 months. Benefits now accrue across technology, across network, across supply chain, and talent.

Speaker #3: And we operate far more cohesively, translating these efforts into stronger operational execution and operating excellence. We've called out three additional areas for group cohesion.

Speaker #3: B2B, where both solutions and go-to-market capability are replicated across the continent. For homes, all of the lessons that we've learned in India are now being extended into Africa.

Speaker #3: Energy efficiency is another key area of focus. We're working with Indus to deploy high energy efficiency power equipment and advanced energy storage solutions aimed at reducing diesel dependence across sites.

Speaker #3: We've also looked at the opportunity to extend our digital platforms, which has stepped up the execution capability within the business. So, we believe, going forward, there is a very large opportunity around synergy across the India business, Indus Towers, Airtel Payments Bank, and our Africa operations.

Gopal Vittal: We've also looked at the opportunity to extend our digital platforms, which has stepped up the execution capability within the business. We believe, going forward, there is very large opportunity around synergy for across the India business, Indus Towers, Airtel Payments Bank, and our Africa operations. Let me provide a brief update on our new growth bets, and let me start with our financial services portfolio. We recently went live with our lending services, marking an important milestone in our financial services journey. We've done this at remarkable speed, in just about nine months from the date of the application of the license. The real reason for this, which is the secret sauce inside Airtel, is that we have reused all of our digital platforms.

Speaker #3: Let me provide a brief update on our new growth breadths. And let me start with our financial services portfolio. We recently went live with our lending services, marking an important milestone in our financial services journey.

Speaker #3: We've done this at remarkable speed—just about nine months from the date of the application for the license. And the real reason for this, which is the secret sauce inside Airtel, is that we have reused all of our digital platforms.

Speaker #3: So, our data platform, our CLM platform, as well as our channel platform, are now in the NBFC, as the same platform that we've been using inside the telco.

Gopal Vittal: Our data platforms, our CLM platform, as well as our channel platform, are now in the NBFC as the same platform that we've been using inside the telco. The momentum is building, and we're excited by the opportunity as we work towards making simple and secure financial services more accessible to a wider set of customers. Airtel Payments Bank, which is another engine of our financial services portfolio, continues to deliver strong performance. We ended Q1 with a monthly transacting user base of around 120 million. The annualized revenue run rate is now over INR 3,400 crores and deposits remain strong at a shade under INR 4,400 crores, growing at 17% year on year. Both these businesses are integrated by what we call our storefront, which is Airtel Finance.

Speaker #3: The momentum is building, and we're excited by the opportunity as we work towards making simple and secure financial services more accessible to a wider set of customers.

Speaker #3: Airtel Payments Bank, which is another engine of our financial services portfolio, continues to deliver strong performance. We ended quarter one with a monthly transacting user base of around 120 million.

Speaker #3: Their annualized revenue run rate is now over ₹3,400 crore, and deposits remain strong at just under ₹4,400 crore, growing at 17% year on year.

Speaker #3: Both these businesses are integrated by what we call our storefront, which is Airtel Finance. This storefront, Airtel Finance, covers lending—through our NBFC as well as some partners—transacting, which is our payments bank, some early moves on savings to fixed deposits, and more such engagement options are planned.

Gopal Vittal: This storefront, Airtel Finance, covers lending through our NBFC as well as some partners, transacting, which is our payments bank, some early moves on savings to fix deposits, and more such engagement options are planned. In fact, the total loan disbursements through Airtel Finance is now at over INR 750 crores per month. Using our digital capabilities, we have a proven model to deliver lower delinquencies, lower cost of acquisition, and lower collection costs. We believe these capabilities will help us scale our NBFC and the payment stack. The second growth bet is data centers. The business is on a strong growth trajectory with sustained revenue growth. We believe that our market share here at about 12% is clearly low for the large heft and size that we have as a company. We're working towards our ambition to build one gigawatt in the next few years.

Speaker #3: In fact, the total loan disbursements through Airtel Finance are now at over ₹750 crore per month. Using our digital capabilities, we've demonstrated that we have a proven model to deliver lower delinquencies, lower cost of acquisition, and lower collection costs.

Speaker #3: We believe these capabilities will help us scale our NBFC and the Payments Bank. The second growth bet is data centers. The business is on a strong growth trajectory, with sustained revenue growth.

Speaker #3: We believe that our market share here, at about 12%, is clearly low given the large heft and size that we have as a company.

Speaker #3: We're working towards our ambition to build 1 gigawatt in the next few years. Many of those contracts have been stitched up. We're also in the process of acquiring more land in the right locations, and in the coming quarters, as we finalize some of these landmark deals, you will hear more progress updates from us.

Gopal Vittal: Many of those contracts have been stitched up. We're also in the process of acquiring more land in the right locations. In the coming quarters, as we finalize some of these landmark deals, you will hear more progress update from us. The other area of focus is Airtel Cloud. We continue to see a strong momentum here, with almost all critical services now live on our platform. Over the quarter, we've added 11 new customers, taking the total customer count to 33. The strength and readiness of our platform is reflected in all of the certifications that we received from MEITY, amongst others, which will further strengthen our go-to-market proposition. We believe this business needs four things to really succeed, the right talent, capital that we have already invested, the go-to-market capabilities that we have, and the right solutions for continuing to build out what customers need.

Speaker #3: The other area of focus is Airtel Cloud. We continue to see strong momentum here, with almost all critical services now live on our platform.

Speaker #3: Over the quarter, we've added 11 new customers, taking the total customer count to 33. The strength and readiness of our platform is reflected in all of the certifications that we've received from METI, amongst others, which will further strengthen our go-to-market proposition.

Speaker #3: We believe this business needs four things to really succeed: the right talent, capital that we have already invested, the go-to-market capabilities that we have, and the right solutions for continuing to build out what customers need.

Speaker #3: We're stepping up significant investments to continue to invest behind this, in order to scale this. With this, let me hand over to Shashwath for an update on the India business.

Gopal Vittal: We're stepping up significant investments to continue to invest behind this in order to scale this. With this, let me hand over to Shashwat for an update on the India business.

Speaker #2: Thank you, Gopal. And a very good afternoon to everyone. I'll first share an update on each of our business segments in India, followed by an update on our strategic priorities.

Shashwat Sharma: Thank you, Gopal, a very good afternoon to everyone. I'll first share an update on each of our business segments in India, followed by an update on our strategic priorities. Let me start with mobile. This quarter, we added 3.3 million revenue-earning customers and 5 million smartphone data customers. We added 1 million postpaid customers this quarter, which is the highest ever addition in any quarter for us. Postpaid customers now account for 8% plus of our total customer base. Our ARPU for the quarter came in at INR 264, which also had a benefit of an extra day during the quarter. Homes, we delivered an attach of 473,000, which is a moderation over our previous few quarters trajectory. I will talk about this in detail in the strategy section. Digital TV, we added 6,000 more customers during this quarter, led by strong adoption of IPTV.

Speaker #2: Let me start with mobile. This quarter, we added 3.3 million revenue-earning customers, and 5 million smartphone data customers. We added 1 million postpaid customers this quarter, which is the highest-ever addition in any quarter for us.

Speaker #2: Postpaid customers now account for over 8% of our total customer base. Our ARPU for the quarter came in at 2,264, which also had the benefit of an extra day during the quarter.

Speaker #2: Homes – we delivered an attached of 473,000, which is a moderation over our previous few quarters' trajectory. I will talk about this in detail in the strategy section.

Speaker #2: During the quarter, we added 6,000 more customers to Digital TV, led by strong adoption of IPTV. Our IPTV take rates continue to improve and deliver on our convergence agenda that we have been driving in the business.

Shashwat Sharma: Our IPTV take rate continued to improve and deliver on our convergence agenda that we have been driving the business. Airtel Business revenue came in at about INR 5,670 crores, growing 3.2% sequentially and nearly 12% over last year. The quarter saw large deal wins across core connectivity and digital portfolio, as well as we have a visibility on sustained growth in the quarters to come on B2B. Our digital businesses delivered another quarter of solid performance, with revenue growth of nearly 6% sequentially. We are seeing strong traction across our portfolio, including cloud, cybersecurity, IoT, digital platforms, and CPaaS, and we are seeing some notable deal wins during the quarter. Let me now move to the strategic pillars and start with quality customers. In the home segment, we still see a market opportunity, which remains very significant.

Speaker #2: Airtel Business revenue came in at about ₹5,670 crore, growing 3.2% sequentially and nearly 12% over last year. The quarter saw large deal wins across core connectivity and the digital portfolio. We also have visibility on sustained growth in the quarters to come on B2B.

Speaker #2: Our digital businesses delivered another quarter of solid performance. With revenue growth of nearly 6% sequentially, we are seeing strong traction across our portfolio, including cloud, cybersecurity, IoT, digital platforms, and CPaaS.

Speaker #2: We are seeing some notable deal wins during the quarter. Let me now move to the strategic pillars and start with quality customers. In the Homes segment, we still see a market opportunity that remains very significant.

Speaker #2: Demand for high-speed connectivity continues to be supported by rising smart TV penetration, higher concurrent usage within households, and rapidly evolving data consumption needs. The majority of this demand is concentrated across the top 1,000 towns, and this is shaping where we invest and how we serve this market.

Shashwat Sharma: Demand for high-speed connectivity continues to be supported by rising smart TV penetration, higher concurrent usage within households, and rapidly evolving data consumption needs. Majority of this demand is concentrated across the top 1,000 towns, and this is shaping where we invest and how we serve this market. Our strategy in homes is centered on building a high-quality customer base through differentiated services and a seamless experience across our touch points. Over the last couple of quarters, we have drawn important learnings from our FWA expansion. While low entry-level pricing helped attract customers, the outcomes were not consistent with the quality of customers franchise we wanted to build, with a higher churn and weaker continuity in certain cohorts. In addition, rising global memory and chipset pricing have also challenged FWA economics. We have responded to this with discipline.

Speaker #2: Our strategy in Homes is centered on building a high-quality customer base through differentiated services and a seamless experience across our touchpoints. Over the last couple of quarters, we have drawn important learnings from our FTTH expansion.

Speaker #2: While low entry-level pricing helped attract customers, the outcomes were not consistent with the quality of customer franchise we wanted to build, resulting in higher churn and weaker continuity in certain cohorts.

Speaker #2: In addition, rising global memory and chipset prices have also challenged FW economics. We have responded to this with discipline. We have tightened acquisition quality, doubled down on improving our churn, and are driving towards a healthier business outcome.

Shashwat Sharma: We have tightened acquisition quality, doubled down on improving our churn, and driving towards a healthier business outcome. Our conviction in sustainable growth in homes is to accelerate fiber and deploy FWA with sharper precision where the economics and customer quality are compelling. This has already begun to show momentum through the last few months and weeks as we have gone through this. Leveraging fixed-mobile convergence on top of this is central to our home strategy. Our One Airtel plan brings these services together through a proposition that offers greater convenience, flexibility, and value for our customers, and we are seeing promising adoption. Convergence has been an important lever to deepen our relationships with our customers and reduce churn. Let me now switch to mobile. Our focus remains on accelerating ARPU growth through portfolio premiumization on mobile while continuing to maintain a competitive share of customer activations.

Speaker #2: Our conviction in sustainable growth in Homes is to accelerate fiber and deploy FW with sharper precision, where the economics and customer quality are compelling.

Speaker #2: This is already beginning to show momentum through the last few months and weeks as we have gone through this. Leveraging fixed-mobile convergence on top of this is central to our home strategy.

Speaker #2: Our 180 plan brings these services together through a proposition that offers greater convenience, flexibility, and value for our customers, and we are seeing promising adoption.

Speaker #2: Convergence will be an important lever to deepen our relationship with our customers and reduce churn. Let me now switch to mobile. Our focus remains on accelerating ARPU growth through portfolio premiumization on mobile, while continuing to maintain a competitive share of customer additions.

Speaker #2: Postpaid is a key R2 growth lever for us, with significant opportunity ahead of us. Our recently launched Fastlane technology, leveraging network slicing on 5G, is delivering differentiation on postpaid, which is driving an acceleration of the business.

Shashwat Sharma: postpaid is a key ARPU growth lever for us, with significant opportunity ahead of us. Our recently launched Fast Lane technology, leveraging network slicing on 5G, is delivering the differentiation on postpaid, which is driving an acceleration of the business. For upgrading customers here, we are focused on driving persuasion, simplification of our journeys, and superior value discovery across all our channels. Within prepaid itself, we continue to see a large opportunity to move customers to their most relevant plans by using customer context and next best action capabilities that we have developed on our digital stack. In addition, handset upgrades from feature phones to smartphones, rising data usage, 5G adoption, and international roaming provide meaningful headroom for ARPU expansion going forward. I do want to reiterate that the longer-term pricing architecture of the industry still needs to be repaired, and the industry must charge for data consumption.

Speaker #2: For upgrading customers here, we are focused on driving persuasion, simplification of our journeys, and superior value discovery across all our channels. Within prepaid itself, we continue to see a large opportunity to move customers to their most relevant plans by using customer context and next best action capabilities that we have developed on our digital stack.

Speaker #2: In addition, handset upgrades from feature phones to smartphones, rising data usage, 5G adoption, and international roaming provide meaningful headroom for ARPU expansion going forward.

Speaker #2: I do want to reiterate that the longer-term pricing architecture of the industry still needs to be repaired, and the industry must charge for data consumption.

Speaker #2: This is paramount for sustained ARPU growth in the longer term. Let me now turn to B2B. Enterprise demand is moving beyond traditional connectivity, creating significant opportunities across our portfolio.

Shashwat Sharma: This is paramount for sustained ARPU growth in the longer term. Let me now turn to B2B. Enterprise demand is moving beyond traditional connectivity, creating significant opportunities across our portfolio. We are approaching this opportunity with a clear execution plan across three areas. First is to build a world-class infrastructure, expanding our fiber availability, strengthening quality to deliver platform networks, augmenting our subsea capacity, deepening our data centers, and data center connectivity with OPGW infrastructure. Over the last three years, we have deployed about 139,000 kilometers of fiber, and we believe sustained investments in this infrastructure layer is critical to meeting our enterprise demand. Second, we are scaling up our digital services portfolio across cybersecurity, IoT, CPaaS, SD-WAN, and cloud. Third, we are raising the bar in account management as well as our delivery and assurance.

Speaker #2: We are approaching this opportunity with a clear execution plan across three areas. The first is to build a world-class infrastructure — expanding our fiber availability, strengthening quality to deliver flawless networks, augmenting our subsea capacity, deepening our data centers, and enhancing data center-to-data center connectivity with OPDW infrastructure.

Speaker #2: Over the last three years, we have deployed about 1 lakh 39,000 kilometers of fiber, and we believe sustained investments in this infrastructure layer are critical to meeting our enterprise demand.

Speaker #2: Second, we are scaling up our digital services portfolio across cybersecurity, IoT, CPaaS, SD-WAN, and cloud. Third, we are raising the bar on account management, as well as our delivery and assurance.

Speaker #2: And all these initiatives are beginning to deliver positive outcomes and are helping us to accelerate our business. The second pillar of our strategy is the obsession with offering a brilliant customer experience.

Shashwat Sharma: All these initiatives are beginning to deliver positive outcomes and are helping for us to accelerate our business. The second pillar of our strategy is the obsession with offering brilliant customer experience. Customer experience remains at the heart of our strategy and underpins everything we do, from network investments to digital innovation. We are investing in upgrading our transport layer and building advanced 5G capabilities. Network slicing is a key enabler of this strategy, which is helping us improve our 5G network efficiency, expand effective capacity, and deliver differentiated experience for our customers. Our Converge data engine, which powers the digital experience layer, enabling faster execution and customer engagement with greater precision, is at the core of our growth. By bringing together customer context, data intelligence, and digital tools, it allows us to deliver more personalized and contextual interventions across the life cycle of the customer.

Speaker #2: Customer experience remains at the heart of our strategy and underpins everything we do, from network investments to digital innovation. We are investing in upgrading our transport layer and building advanced 5G capabilities.

Speaker #2: Network slicing is a key enabler of this strategy, which is helping us improve our 5G network efficiency, expand effective capacity, and deliver a differentiated experience for our customers.

Speaker #2: Our converged data engine, which powers the digital experience layer—enabling fast execution and customer engagement with greater precision—is at the core of our growth.

Speaker #2: By bringing together customer context, data intelligence, and digital tools, it allows us to deliver more personalized and contextual interventions across the customer lifecycle.

Speaker #2: The third pillar of our strategy is to build and leverage our digital capabilities. Here, we are using AI to reimagine how work gets done across the organization—from customer engagement and network operations, to frontline productivity and product management.

Shashwat Sharma: The third pillar of our strategy is to build and leverage our digital capabilities, here we are using AI to reimagine how work gets done across Airtel, from customer engagement, network operations, to frontline productivity and product management. The focus is on combining data, intelligence, and automation in ways that improve speed, precision, and consistency across the business. I will share a few highlights from the quarter that's gone by. We continue to progress and scale our AI for personalization, spam protection, and call center operations. This is something I called out last quarter as well. Our real-time and context-based decisioning has now expanded to 7.7 billion next best actions, and this is now lit up across all our channels, led by the Airtel Thanks app.

Speaker #2: The focus is on combining data intelligence and automation in ways that improve speed, precision, and consistency across the business. I will share a few highlights from the quarter that's gone by.

Speaker #2: We continue to progress and scale our AI for personalization, spam protection, and call center operations. This is something I had called out last quarter as well.

Speaker #2: Our real-time and context-based decisioning has now expanded to 7.7 billion next-best actions. And this is now lit up across all our channels, led by the Airtel Thanks app.

Speaker #2: Since its launch, our AI-led anti-spam solution has identified over 93 billion spam calls and 4 billion spam messages, and blocked more than 1.4 million fraudulent links.

Shashwat Sharma: Since its launch, our AI-led anti-spam solution has identified over 93 billion spam calls and 4 billion spam messages and blocked over 1.4 million fraudulent links. Customer interactions through our call center voice bot has increased to 309 million in this quarter. I'm happy to report that this quarter we were able to make a meaningful difference in our delivered workmanship across 30,000 field engineers with the help of AI. With a patented technology that allows inferencing on the endpoint device rather than the cloud, we are now leveraging real-time image processing to standardize workmanship in our operations. This is leading to a step change in quality of installs and fault repair and enforcing adherence of safety measures on ground, which remains a very important priority across the business.

Speaker #2: Customer interactions through our call center and voice bot have increased to 309 million this quarter. I'm happy to report that this quarter we were able to make a meaningful difference in our delivered workmanship across 30,000 field engineers with the help of AI.

Speaker #2: With a patented technology that allows inferencing on the endpoint device rather than the cloud, we are now leveraging real-time image processing to standardize workmanship in our operations.

Speaker #2: This is leading to a step change in the quality of installs and fault repair, and enforcing adherence to safety measures on the ground, which remains a very important priority across the business.

Speaker #2: All of this transformation is led by a homegrown agentic platform, with a clear focus on creating cost-efficient automation and compute, and having clear guardrails for customer safety, privacy, and sovereignty in what we do.

Shashwat Sharma: All of this transformation is led by a homegrown agentic platform with a clear focus on creating cost-efficient automation and compute and having clear guardrails for customer safety, privacy, and sovereignty of what we do. The fourth pillar of our strategy is war on waste. This remains a core pillar to drive cost discipline across the operations. Over the last five years, we have optimized over INR 11,000 crores from our network OpEx, reflecting the depth and consistency of this program. We have further sharpened our focus on identifying and eliminating waste across the portfolio. This includes redesigning our ways of working and taking decisive actions to mitigate cost pressures, including redesigning our tower operations to eliminate diesel consumption and making sharp choices in the way we deploy CapEx in home service. These efforts have helped us in navigating this phase of global cost headwinds in the business.

Speaker #2: The fourth pillar of our strategy is warrant-based. This remains a core pillar to drive cost discipline across the operation. Over the last five years, we have optimized over ₹11,000 crore from our network opex, reflecting the depth and consistency of this program.

Speaker #2: We have further sharpened our focus on identifying and eliminating waste across the portfolio. This includes redesigning our ways of working and taking decisive actions to mitigate cost, redesigning our tower operations to eliminate diesel consumption, and making sharp choices in the way we deploy capex in the Homes business.

Speaker #2: These efforts have helped us in navigating this phase of global cost headwinds in the business. At the same time, we recognize that there is considerable work ahead to be done in building a more efficient, resilient, and sustainable operating model.

Shashwat Sharma: At the same time, we recognize that there is considerable work ahead to be done to building a more efficient, resilient, and sustainable operating model. Overall, we have delivered another quarter of strong performance, supported by the strength of our diversified portfolio and sharp execution across all our businesses. Looking ahead, we continue to see significant growth opportunities across our core businesses, which is growing mobility ARPU, accelerating growth in homes, and scaling our B2B businesses. We are investing across our digital portfolio and new growth engines that will strengthen Airtel's future readiness and support sustainable long-term growth. Obsession with brilliant customer experience remains our driving force, and now we are reimagining our processes with the world of AI to enhance productivity, step change our experience, and drive operating leverage. With that, let me hand it over back to Rajai to open up the Q&A session.

Speaker #2: So, to sum up, overall we have delivered another quarter of strong performance, supported by the strength of our diversified portfolio and sharp execution across all our businesses.

Speaker #2: Looking ahead, we continue to see significant growth opportunities across our core businesses, which are growing mobility R2, accelerating growth in Homes, and scaling our B2B businesses.

Speaker #2: We are investing across our digital portfolio and new growth engines that will strengthen Airtel's future readiness and support sustainable, long-term growth. Obsession with brilliant customer experience remains our driving force, and now we are reimagining our processes with the world of AI to enhance productivity, step-change our experience, and drive operating leverage.

Speaker #2: With that, let me hand it back to Vivek to open up the Q&A session. Thank you.

Shashwat Sharma: Thank you.

Speaker #1: Thank you very much, Ashwath. We will now begin the Bharti Airtel Q&A interactive session for all the participants. Please note that the Q&A session will be restricted to the analyst and investor community only.

Moderator: Thank you very much, Shashwat. We will now begin the Bharti Airtel Q&A interactive session for all the participants. Please note that the Q&A session will be restricted to the analyst and investor community only. Due to time constraints, we would request if you could limit the number of questions to two per participant to enable more participation. Interested participants may click on Raise Hand option on your Zoom application to join the Q&A queue. Upon announcement of name, participants to kindly click on Unmute Myself in the pop-up screen and start asking the question post introduction. Participants are requested to limit their questions to Bharti Airtel till 12:00 p.m., as management will start asking the questions 1:00 p.m. onwards. With this, the first question comes from Mr. Piyush Chaudhry. Mr. Chaudhary, you may please unmute your side, introduce yourself and ask your question now.

Operator: Thank you very much, Shashwat. We will now begin the Bharti Airtel Q&A interactive session for all the participants. Please note that the Q&A session will be restricted to the analyst and investor community only. Due to time constraints, we would request if you could limit the number of questions to two per participant to enable more participation. Interested participants may click on Raise Hand option on your Zoom application to join the Q&A queue. Upon announcement of name, participants to kindly click on Unmute Myself in the pop-up screen and start asking the question post introduction. Participants are requested to limit their questions to Bharti Airtel till 12:00 p.m., as management will start asking the questions 1:00 p.m. onwards. With this, the first question comes from Mr. Piyush Chaudhry. Mr. Chaudhary, you may please unmute your side, introduce yourself and ask your question now.

Speaker #1: Due to time constraints, we would request that you limit the number of questions to two per participant to enable more participation. Interested participants may click on the 'Raise Hand' option on your Zoom application to join the Q&A queue.

Speaker #1: Upon announcement of name, participants to kindly click on unmute myself in the pop-up screen and start asking the question post-introduction. Participants are requested to limit their questions to Bharti Airtel till 12:00 p.m.

Speaker #1: As management will start asking the questions from 1:00 p.m. onwards. With this, the first question comes from Mr. Piyush Chaudhary. Mr. Chaudhary, you may please unmute your side, introduce yourself, and ask your question now.

Speaker #3: Hi, thanks for the opportunity. This is Piyush from HSBC. Two questions. Firstly, on the mobile R2, what led to the strong improvement quarter-on-quarter?

Piyush Chaudhry: Hi. Thanks for the opportunity. This is Piyush from HSBC. Two questions. Firstly, on the mobile ARPU, what led to strong improvement quarter on quarter? Was there any product revamp or some specific plan adoption rules like Fast Lane? Any color over here would be useful. Should we expect this trend to be sustainable in absence of tariff hike? Secondly, on Airtel Business, you've delivered a very strong growth year on year. Can you break down the levers of such growth into various sub-segments like connectivity, cloud, data center? If you can discuss the outlook of this. Is this kind of number sustainable? Thank you.

Piyush Choudhary: Hi. Thanks for the opportunity. This is Piyush from HSBC. Two questions. Firstly, on the mobile ARPU, what led to strong improvement quarter on quarter? Was there any product revamp or some specific plan adoption rules like Fast Lane? Any color over here would be useful. Should we expect this trend to be sustainable in absence of tariff hike? Secondly, on Airtel Business, you've delivered a very strong growth year on year. Can you break down the levers of such growth into various sub-segments like connectivity, cloud, data center? If you can discuss the outlook of this. Is this kind of number sustainable? Thank you. Shashwat, why don't you take the first question, I'll take the second one.

Speaker #3: Was there any product revamp or some specific plan adoption roles, like Fast Lane? Any color over here would be useful. And should we expect this trend to be sustainable in the absence of a tariff hike?

Speaker #3: Secondly, on Airtel Business, you've delivered very strong growth year-on-year. Can you break down the levers of such growth into various sub-segments, like connectivity, cloud, data center, and if you can discuss the outlook for this?

Speaker #3: Is this kind of numbers sustainable? Thank you.

Speaker #4: Ashwath, why don't you take the first question? I'll take the second one.

Gopal Vittal: Shashwat, why don't you take the first question, I'll take the second one.

Speaker #2: Yeah, sure. So thanks, Piyush, for that question. And I think, on mobile R2, CVCs, as we said, we see substantial headroom within the current customer base itself.

Shashwat Sharma: Yeah, sure, Gopal. Thanks, Piyush, for that question. I think on mobile ARPU, we see substantial headroom within the current customer base itself, the way we are structured, because there's enough upgrade that's happening, which is driven by consumption of data, moving to unlimited plans, as well as an acceleration on the postpaid with the differentiation we have brought with Fast Lane technology. I think it's a combination. We see reasonable headroom in front of us to continue this momentum in the midterm. Long term, as I spoke, I think the pricing architecture will have to repair, with charging for data and consumption becoming the norm if we have to see this kind of a long-term sustainable. I think in the midterm, there's enough and more we have here.

Speaker #2: The way we are structured, because there's enough upgrade that's happening, which is driven by consumption of data, moving to unlimited plans, as well as an acceleration on the postpaid with a differentiation we have brought with Fast Lane technology.

Speaker #2: So I think it's a combination. We see reasonable headroom in front of us to continue this momentum in the mid-term. Long term, as I spoke, I think the pricing architecture will have to repair.

Speaker #2: With charging for data and consumption becoming the norm, if we have to see this kind of a long-term sustainable model... But I think in the midterm, there's enough and more we have here.

Speaker #4: You know, Piyush, I think on the B2B side, like you've mentioned, our portfolio comprises three types of businesses. One is the connectivity business.

Gopal Vittal: Piyush, I think on the B2B side, like you mentioned, I think our portfolio comprises of 3 types of businesses. One is the connectivity business, second is our wholesale business, which tends to operate at low margins, and the third is the digital businesses that we have within B2B, which is our data center, cloud, CPaaS, IoT, cybersecurity and so on. Over the last couple of years, we have seen sustained growth in our digital businesses and it's now beginning to accelerate. The problem that we've had in the business in the past has been that we have had a large dependence on wholesale, which is subject to a lot of price pressure, as also movement of messaging away from SMS to things like WhatsApp and so on and so forth. The connectivity business has been sort of the market growth at low single digits.

Speaker #4: Second is our wholesale business, which tends to operate at low margins. And the third is the digital businesses that we have within B2B, which are our data center, cloud, CPaaS, IoT, cybersecurity, and so on.

Speaker #4: Over the last couple of years, we have seen sustained growth in our digital businesses, and it's now beginning to accelerate. The problem that we have had in the business in the past has been that we had a large dependence on wholesale, which is subject to a lot of price pressure, as well as the movement of messaging away from SMS to things like WhatsApp and so on and so forth.

Speaker #4: The connectivity business has been sort of the market growth at a low single digits. So what we have seen in the quarter is a step-up in our digital businesses as we are continuing to make investments across all of these areas.

Gopal Vittal: What we have seen in the quarter is a step-up in our digital businesses as we are continuing to make investments across all of these areas. Also a step-up in the connectivity side of the portfolio, particularly on the global side, as we won some larger deals, which has impacted the quarter. I think that bodes well even for the underlying margin of the business this quarter.

Speaker #4: And also a step-up in the connectivity side of the portfolio, particularly on the global side, as we won some larger deals, which has impacted the quarter.

Speaker #4: And I think that bodes well, even for the underlying margin of the business this quarter.

Speaker #3: Got it. Thank you, Gopal. And Ashwath.

Piyush Chaudhry: Got it. Thank you, Gopal and Shashwat.

Piyush Choudhary: Got it. Thank you, Gopal and Shashwat.

Speaker #1: The next question comes from Mr. Vivekanand Subraman. Mr. Subraman, you may please unmute your side. Please introduce yourself and ask your question now.

Moderator: The next question comes from Mr. Vivek Anand Subburaman. Mr. Subburaman, you may please unmute your side, introduce yourself and ask your question now.

Operator: The next question comes from Mr. Vivek Anand Subburaman. Mr. Subburaman, you may please unmute your side, introduce yourself and ask your question now.

Speaker #3: Yeah, hi. I'm Vivekanand from Ambit. I have two questions. So the first one is on the Capex. I understand that your annual Capex is likely to be in the $4 billion ballpark.

Vivekanand Subbaraman: Yeah. Hi, I'm Vivek Anand from Ambit. I have two questions. The first one is on the CapEx. I understand that your annual CapEx is likely to be in the INR 4 billion ballpark. Just to drill down a bit further on this, how much reallocation of this CapEx is happening towards projects like AI infrastructure, which include data centers, subsea cables, and sovereign compute? How does 5G standalone also play a role in respect to the overall CapEx number? That's the first one. The second one is on the B2B revenue mix. Gopal, thanks for giving color on Piyush's question.

Speaker #3: Just to drill down a bit further on this, how much reallocation of this capex is happening towards projects like AI infrastructure, which include data centers, subsea cables, and sovereign compute?

Speaker #3: And how does 5G standalone also play a role with respect to the overall Capex number? That's the first one. The second one is on the B2B revenue mix.

Speaker #3: So, Gopal, thanks for giving color on Piyush's question. Just to look at this business a bit further down the line, with increased share from digital services—which are, let's say, asset-light and low margin, like CPaaS or digital—how do you expect the overall Airtel business EBITDA margins to trend over the next two to three years?

Vivekanand Subbaraman: Just to look at this business a bit further down the line, with increased share from digital services, which are, let's say, asset light and low margin like CPaaS or digital, how do you expect the overall Airtel Business EBITDA margins to trend over the next two to three years? If you can talk about, let's say, the conversion cycles for the recent deals that you have signed in Airtel Cloud and translation into revenue, that'll be great. Thank you.

Speaker #3: And if you can talk about, let's say, the conversion cycles for the recent deals that you've signed in Airtel Cloud and the translation into revenue, that would be great.

Speaker #3: Thank you.

Speaker #4: Well, you know, so I think with detail on the Capex, Shamim, can you come in? But we have—I would just say that the radio Capex has moderated across the portfolio over the last couple of years.

Gopal Vittal: Well, I think the detail on the CapEx, Soumen can come in. I would just say that the radio CapEx has moderated across the portfolio over the last couple of years. I think that is clear. Yes, there will be some step-ups based on what happens in the competitive sphere, broadly it is sort of moderated. Core CapEx is small. The large part of our CapEx is going on transport, which includes all of the stuff around fiber and fibering up the country and so on and so forth. That, by the way, includes homes as well. I include that as part of the transport. For 5G standalone, the CapEx is very modest because it's largely software. Like we said, it's just a switch of a button.

Speaker #4: So, I think that is clear. Yes, there will be some step-ups based on what happens in the competitive sphere, but broadly, it is sort of moderated.

Speaker #4: Core Capex is small. The large part of our Capex is going on transport, which includes all of the stuff around fiber and fibering up the country, and so on and so forth.

Speaker #4: And that, by the way, includes homes as well, so I include that as part of the transport. For 5G standalone, the capex is very modest because it's largely software. Like we've said, it's just a switch or a button.

Gopal Vittal: Many of these investments over the next couple of years, we will now continue to rapidly scale up our data center portfolio as we are building out from the 120, 130 megawatts all the way to a gigawatt over the next few years. There is going to be a period of rapid CapEx spend that you will see. Within that, the overall CapEx pool, we will have to sort of see how do we moderate it. I think my message would be that wherever we think that there's a legitimate need for the business in order to step up growth, in order to be competitive or to actually plant some of these newer bets, as a company, we will not hold back on CapEx. On the B2B revenue mix, your question was on margins as the portfolio retools.

Speaker #4: And many of these investments over the next couple of years will now continue to rapidly sort of scale up our data center portfolio, as we are building out from the 120, 130 megawatts all the way to a gigawatt over the next few years.

Speaker #4: So, there is going to be a period of rapid Capex spend that you will see. And within that overall Capex pool, we will have to sort of see how we moderate it.

Speaker #4: I think my message would be that wherever we think there is a legitimate need for the business in order to step up growth, to be competitive, or to actually plant some of these newer bets, as a company, we will not hold back on Capex.

Speaker #4: On the B2B revenue mix, your question was on margins as the portfolio retools. I think the fact is that this business is a clutch of different businesses.

Gopal Vittal: I think the fact is that this business is a clutch of different businesses. When you look at areas like cybersecurity and CPaaS, margins are low because, as you rightly pointed out, investment is low. However, if you look at the connectivity side, the margins there are very healthy. IoT, the margins are very healthy. In cloud and data centers, there is a significant investment as well. So it's not that these are light investment sort of options. There is heavier investment. Again, the margins are commensurate with the kind of investments. I think longer term, as the portfolio retools, we think the margins will be in this ballpark, maybe sort of trend slightly downwards as we see the step up in the digital portfolio.

Speaker #4: When you look at areas like cybersecurity and CPaaS, margins are low because, as you rightly pointed out, investment is low. However, if you look at the connectivity side, the margins there are very healthy.

Speaker #4: IoT, the margins are very healthy. But in cloud and data centers, there is a significant investment as well. So it's not that these are light-investment sort of options.

Speaker #4: So, there is heavier investment. And again, the margins are commensurate with the kind of investments. I think, longer term, as the portfolio retools, we think the margins will be in the ballpark—maybe sort of trend slightly downwards.

Speaker #4: As we see the step-up in the digital portfolio, the real metric for us that we should be looking at is faster revenue growth because, ultimately, this market—as we've repeatedly stressed—is very large.

Gopal Vittal: The real metric for us that we should be looking at is faster revenue growth, because ultimately this market, as we've repeatedly stressed, is very large and all of it depends on our ability to execute. Whether it's data center, whether it's cloud, these are very large markets, very fast-growing markets. It is our ability to execute that is the limitation, which requires not just capital, but requires talent, it requires the right kind of solutions, and, of course, it requires replicable business practices or go-to-market practices. That is the way we see this business. Soumen, is there anything else to add on the CapEx?

Speaker #4: And all of it depends on our ability to execute. So whether it's data center or cloud, these are very large, very fast-growing markets.

Speaker #4: And it is our ability to execute that is the limitation, which will require not just capital, but also talent. It requires the right kind of solutions.

Speaker #4: And of course, it requires replicable business practices or go-to-market practices. So that is the way we see this business. Shamin, is there anything else to add on the capex?

Speaker #2: No, Gopal, you have covered Capex well.

Soumen Ray: No, Gopal. You have covered CapEx well.

Speaker #3: Right. Thank you, Gopal, for the commentary. Just one follow-up. We saw that you raised $1 billion at Nextra to accelerate the investments in that business.

Vivekanand Subbaraman: Right. Thank you, Gopal, for the commentary. Just one follow-up. We saw that you raised INR 1 billion at Nxtra to accelerate the investments in that business. Gopal, just to understand your CapEx strategy, since you are stepping up and raising external funding at a relatively early stage in data centers, is it fair to say that you're on wherever you see any meaningful step jump in CapEx, you will look for external sponsorship? Do you lean on your own balance sheet? What are the considerations on whether to use Airtel's own balance sheet to step up versus targeted fundraise at an entity level?

Speaker #3: So, Gopal, just to understand your Capex strategy: since you are stepping up and raising external funding at a relatively early stage in data centers, is it fair to say that year-on, wherever you see any meaningful step-jump in Capex, you will look for external sponsorship? Or do you lean on your own balance sheet?

Speaker #3: What are the considerations on whether to use Airtel's own balance sheet to step up, versus targeted fundraise at an entity level?

Speaker #4: I think we’ll cross that bridge when we come to it. The fact is that Nextra will need funding, and that funding will be—obviously, there’s some equity infusion, but there will also be debts that will be raised at Nextra, whether it comes off our balance sheet and goes into Nextra, or it comes from outside.

Gopal Vittal: I think we'll cross that bridge when we come to it. The fact is that Nxtra will need funding, and that funding will be, obviously there's some equity infusion, but there'll also be debt that will be raised at Nxtra. Whether it comes off our balance sheet and goes into Nxtra or it comes from outside, I think that's a decision we need to take over time. The fact is that Nxtra will need to lever up in order to build out what is required over the next few years. Soumen, anything to add on this?

Speaker #4: I think that's a decision we need to take over time. But the fact is that Nextra will need to lever up in order to build out what is required over the next few years.

Speaker #4: Shamin, anything to add on this?

Speaker #2: No, Gopal, I think as you said, we will take this call as and when it appears. There was an opportunity which presented itself in Nextra, and we have used that opportunity.

Soumen Ray: No, Gopal. I think as you said, we will take this call as and when it appears. There was an opportunity which presented itself in Nxtra, and we have used that opportunity.

Speaker #3: All right. Thanks, Gopal and Shamin. All the very best.

Vivekanand Subbaraman: All right. Thanks, Gopal and Soumen. All the very best.

Speaker #1: The next question comes from Mr. Sanjesh Jain. Mr. Jain, you may please unmute your line. Please introduce yourself and ask your question now.

Moderator: The next question comes from Mr. Sanjay Jain. Mr. Jain, you may please unmute your side, introduce yourself and ask your question now.

Operator: The next question comes from Mr. Sanjay Jain. Mr. Jain, you may please unmute your side, introduce yourself and ask your question now.

Speaker #3: Thank you. Good afternoon. My question—I have three questions and one bookkeeping question. First, on the Fast Lane: what has been the experience of the customer, or, if you have studied it, how much improvement has the customer felt by moving on to Fast Lane? And will this opportunity attract even more customers?

[Analyst] (ICICI Securities): Thank you. Good afternoon. Thank you for taking my question. I got three question and one bookkeeping question. First, on the Fast Lane, what has been the experience of the customer, or if you would have studied, how much improvement has the customer felt by moving on to the Fast Lane? Will this opportunity attract even more customer? Does it offer an opportunity for us to grab higher market share in postpaid? That's number one. Number two, on the data center business, Gopal, when you mentioned that we are scaling up Nxtra from 120, 130 megawatt to 1 gigawatt hour, this also includes the contract we signed with Google, or this is purely the colo which Nxtra is looking to do? That's second. One on the FWA.

Sanjesh Jain: Thank you. Good afternoon. Thank you for taking my question. I got three question and one bookkeeping question. First, on the Fast Lane, what has been the experience of the customer, or if you would have studied, how much improvement has the customer felt by moving on to the Fast Lane? Will this opportunity attract even more customer? Does it offer an opportunity for us to grab higher market share in postpaid? That's number one. Number two, on the data center business, Gopal, when you mentioned that we are scaling up Nxtra from 120, 130 megawatt to 1 gigawatt hour, this also includes the contract we signed with Google, or this is purely the colo which Nxtra is looking to do? That's second. One on the FWA.

Speaker #3: And does it offer an opportunity for us to grab higher market share in postpaid? That’s number one. Number two, on the data center business, Gopal, when you mentioned it, we are scaling up Nxtra from 120–130 megawatt to 1 gigawatt.

Speaker #3: Does this also include the contract we signed with Google, or is this purely the colo that Nextra is looking to do? That's the second question. And one on the FWA—Shashwath, you mentioned that there is an increase in churn and we are making a change in the customer acquisition strategy.

[Analyst] (ICICI Securities): Shashwat, you mentioned that there is an increase in churn and we are making a change in terms of the customer acquisition strategy. What was the churn rate and does this really materially change the growth rate? When we talk about the churn, that means there were customer which was slipping also. Fairly we should be able to maintain the run rate, which we have been doing in the FWA despite the churn rate. These are the three question. One on the bookkeeping. Finance cost in Africa, particularly does Airtel Money, what it pays interest on the leverage which it does, that also get captured in the interest cost? These are my four questions. Thank you.

Sanjesh Jain: Shashwat, you mentioned that there is an increase in churn and we are making a change in terms of the customer acquisition strategy. What was the churn rate and does this really materially change the growth rate? When we talk about the churn, that means there were customer which was slipping also. Fairly we should be able to maintain the run rate, which we have been doing in the FWA despite the churn rate. These are the three question. One on the bookkeeping. Finance cost in Africa, particularly does Airtel Money, what it pays interest on the leverage which it does, that also get captured in the interest cost? These are my four questions. Thank you.

Speaker #3: What was the churn rate, and does this really materially change the growth rate? Because when we talk about churn, that means there were customers who were slipping also.

Speaker #3: So, fairly, we should be able to maintain the run rate which we have been doing in the FWA, despite the churn rate. These are the three questions.

Speaker #3: And one on the bookkeeping: finance cost in Africa, particularly does Airtel Money—what it pays as interest on the leverage, which it does—does that also get captured in the interest cost?

Speaker #3: These are my four questions. Thank you.

Speaker #4: Gopal, Shashwath, will you take the fast lane?

Shashwat Sharma: Gopal.

Gopal Vittal: Shashwat, you take the Fast Lane.

Shashwat Sharma: I take the Fast Lane and the FWA one, and then I'll hand over to you for the DC and finance cost.

Speaker #1: I'll take the Fast Lane and the FWA one, and then I'll hand over to you for the DCL. So, Sanjay, thank you on the Fast Lane, but I just want to touch upon the fact that, look, what happens with the pricing technology is we are able to—the SaaS pricing technology makes the network more efficient.

Gopal Vittal: Okay.

Shashwat Sharma: Sanjay, thank you. On the Fast Lane part, I just want to touch upon the fact that, look, what happens with the slicing technology is The SA slicing technology makes the network more efficient. We are able to generate more capacity in the network. At an empty network level, it does not make a substantial tangible difference, but when the networks get congested, when you are in a crowd

Speaker #1: We are able to generate more capacity in the network. At an empty network level, it does not make a substantial, tangible difference. But when the networks get congested, when you are in a crowd, those are the kinds of places where it starts showing up in a differential experience.

Shashwat Sharma: Those are the kind of places where it starts showing up in a differential experience. We have had some places, but overall net/net, we have been able to demonstrate that the customers on Fast Lane see a differential experience technically. In reality, in an empty network, it does not make a difference. Having said that, the interest of getting customers to upgrade using Fast Lane as a reassurance of a superior experience is working well for us, and we have seen positive signs of that. We have seen some acceleration and interest in the business, and we continue to see this as a large mode builder for us going forward. On fixed wireless access, Sanjeesh, I'll just touch upon that.

Speaker #1: We have had some places, but overall, net-net, we have been able to demonstrate that the customers on Fast Lane see a differential experience technically.

Speaker #1: But in reality, in an empty network, it does not make a difference. Having said that, the interest in getting customers to upgrade using Fast Lane as a reassurance of a superior experience is working well for us.

Speaker #1: And we have seen positive signs of that in the business. And we continue to see this as a large growth pillar for us going forward.

Speaker #1: On fixed wireless access, Sanjay, I'll just touch upon that. I think the real issue there was the fact that we went down on very aggressive, low acquisition pricing in the market.

Shashwat Sharma: I think the real issue there was the fact that we went down on very aggressive, low acquisition pricing in the market, and that led to some round tripping and quality of acquisition deteriorating. That we have to pull back, Sanjeesh, in terms of what we are seeing there. I think that's a place where we are seeing constant month-on-month improvement. Whether we come back to old rates and all, we'll see. The more important thing for us right now is to constantly grow the business, grow to the right unit economics, and we want to double down much more on fiber and use FWA with the right outcomes. I think that really is the focus for us right now.

Speaker #1: And that led to some round-tripping and the quality of acquisition deteriorating. We have pulled back, Sanjay, in terms of what we are seeing there.

Speaker #1: So, I think that's a place where we are seeing constant month-on-month improvement. Whether we come back to old rates and all, we'll see. The more important thing for us right now is to constantly grow the business, grow it with the right unit economics, and we want to double down much more on fiber and use FWA with the right outcomes.

Speaker #1: So, I think that clearly is the focus for us right now.

Speaker #4: You want to finish the finance cost piece, Shamin?

Gopal Vittal: You want to finish the finance cost piece, Soumen?

Speaker #2: Yes. So, Airtel Money is included in overall Airtel Africa numbers. But you must remember that Airtel Money Limited is a net cash-positive company.

Soumen Ray: Yes, Airtel Money is added into overall Airtel Africa and us. You must remember that Airtel Money Limited is a net cash positive company, so there is no net interest cost. Whatever little cost is there is a part of cost of goods sold. Having said that, there are some derivative and some upstream costs which appears in interest cost and gets consolidated in interest cost. Over to you, Gopal, on the data center.

Speaker #2: So, there is no net interest cost. And whatever little cost is there is a part of cost of goods sold. Having said that, there are some derivatives at some upstream costs, which appear in interest cost and get consolidated in interest cost.

Speaker #2: Over to you, Gopal, on the data center.

Speaker #4: Yeah, I think the data center is a simple answer. Yes, the Google one is also included. I just want to come back to the fast lane.

Gopal Vittal: I think the data center is a simple answer. Yes, the Google one is also included. I just want to come back to the Fast Lane. I think what we have seen is that very clearly for customers on the slides, they're getting better speeds, right? The fact is that for all customers, the speeds have improved because the network has become more efficient. It's a combination of both things that we're seeing. Of course, there is the additional piece that there is a very large opportunity of customers who are sitting on what we believe should be postpaid, but are sitting on prepaid, where the headroom for growth for postpaid is very, very large. I think this is something that we need to get right over the course of the coming years.

Speaker #4: I think what we have seen is that, very clearly, for customers on the slides, they're getting better speeds, right? But the fact is that for all customers, the speeds have improved because the network has become more efficient.

Speaker #4: So it's a combination of both things that we're seeing. And then, of course, there is the additional piece that there is a very large opportunity of customers who are sitting on what we believe should be postpaid but are sitting on prepaid, where the headroom for growth for postpaid is very, very large.

Speaker #4: And I think this is something that we need to get right over the course of the coming years.

Speaker #3: Thanks. Thanks, Gopal. Just one on data centers again. What gives confidence of scaling up to 1 gigawatt hour? Are we seeing that kind of demand in India which can allow?

[Analyst] (ICICI Securities): Thanks. Gopal, just one on data center again. What gives us confidence of scaling up to a 1 GWh? Are we seeing that kind of a demand in India which can allow? There are multiple operators and everybody's talking of a GWh, and today India is at roughly 1.5 GWh. What gives us the confidence, and do we have a strong pipeline which gives this confidence for us?

Sanjesh Jain: Thanks. Gopal, just one on data center again. What gives us confidence of scaling up to a 1 GWh? Are we seeing that kind of a demand in India which can allow? There are multiple operators and everybody's talking of a GWh, and today India is at roughly 1.5 GWh. What gives us the confidence, and do we have a strong pipeline which gives this confidence for us?

Speaker #3: Because there are multiple operators, and everybody is talking of a gigawatt hour. And today, India is at roughly 1.5 gigawatt hours. So what gives us confidence, and do we have a strong pipeline which gives this confidence for us?

Speaker #4: Yes, we do. The short answer to your question is yes, we do. And just to give you a little bit more texture to it, the data center market comprises, as you know, both hyperscalers and domestic enterprises.

Gopal Vittal: Yes, we do. The short answer to your question is yes, we do. Just to give a little bit more texture to it. The data center market, it comprises, as you know, of both hyperscalers and domestic enterprises. Within the hyperscaler segment, a very large part of the workloads run off Mumbai, and therefore one of the key considerations for getting to 1 GW is the right land parcels in Mumbai, which we are in the process of finalizing. That is the first piece. The second part is the existing contract, as you are due to do on Google. The third is upcoming build that is already well underway, and that will be a couple of hundred MW over the course of the next couple of years.

Speaker #4: Within the hyperscaler segment, a very large part of the workloads run out of Mumbai. And therefore, one of the key considerations for getting to 1 gigawatt is finding the right land parcels in Mumbai, which we are in the process of finalizing.

Speaker #4: So that is the first piece. The second part is the existing contracts, as you alluded to, on Google. The third is upcoming build that is already well underway, and that will be a couple of hundred megawatts over the course of the next couple of years.

Speaker #4: And then there is a small gap, so we need to fill the balance with the land parcels that we are looking at in Mumbai.

Gopal Vittal: There is a small gap of the need to fill the balance with the land parcels that we are looking at in Mumbai, where we believe that with those parcels we should be able to fill it. The reason we have gone out on a limb to say that our ambition is to get to a 1 GW in the next few years is because we have very clear line of sight to actually get there.

Speaker #4: We believe that with those parcels, we should be able to fill it. The reason we have gone out on a limb to say that our ambition is to get to a gigawatt in the next few years is because we have very clear line of sight to actually get there.

Speaker #3: Oh, that's great. Thanks, Gopal, Shashwath, and Shomin, for answering all those questions, and best of luck for the coming quarters.

[Analyst] (ICICI Securities): That's great. Thanks, Gopal, Shashwat, and Soumen, answering all those questions and best of luck for the coming quarters.

Sanjesh Jain: That's great. Thanks, Gopal, Shashwat, and Soumen, answering all those questions and best of luck for the coming quarters.

Speaker #1: The next question comes from Sumangal Nivatia. Mr. Nivatia, you may please unmute your side. Introduce yourself and ask your question now.

Moderator: The next question comes from Sumangal Nevatia. Mr. Nevatia, you may please unmute your side, introduce yourself, and ask your question now.

Operator: The next question comes from Sumangal Nevatia. Mr. Nevatia, you may please unmute your side, introduce yourself, and ask your question now.

Speaker #3: All right. Yeah, good afternoon. This is Sumangal from Kotak Securities. Firstly, congratulations to the team on another stellar quarter. I have two or three questions.

Sumangal Nevatia: All right. Good afternoon. This is Sumangal from Kotak Securities. Firstly, congratulations to the team on another stellar quarter. I have two or three questions. First, on the homes. If you see margins are under pressure, and it's been the lowest in the recent past. Sub additions also been lowest in the past seven, eight quarters. Just want to understand, is it a conscious slowdown given the cost inflation which you touched upon initially, or is it a high base catching up or some other increase in competitive landscape here? That's first. Second, on overall data sub addition is continuing very strongly. With regards to the issues of price inflation in the smartphone, is the underlying trend too strong to have an impact here or something which could be an issue or a headwind going forward, given the inflation in the smartphones?

Speaker #3: First, on the homes, if you see, margins are under pressure and have been the lowest in the recent past. Sub-additions have also been the lowest in the past seven to eight quarters.

Speaker #3: So, I just want to understand—is it a conscious slowdown, given the cost inflation which you touched upon initially, or is it a high base catching up, or is there some other increase in the competitive landscape here?

Speaker #3: That's first. Second, on overall data, sub-addition is continuing very strongly. So, with regard to the issues of price inflation in smartphones, is the underlying trend too strong to have an impact here?

Speaker #3: Or something which could be an issue or a headwind going forward, given the inflation in smartphones? And lastly, you touched upon this, but just some more color on the B2B capex.

Sumangal Nevatia: Lastly, you've touched upon this, but just some more color on the B2B CapEx. I mean, it's been quite volatile, still around mid-teens in terms of revenue. Given our plans, is the actual spend pick up more medium-term and not near-term? If I can get some more color on the cadence here.

Speaker #3: I mean, it's been quite volatile—still around the mid-teens in terms of revenue. So, given our plans, is the actual spend pickup more medium-term and not near-term?

Speaker #3: If I can get some more color on the cadence here.

Speaker #4: Yeah. I think on the B2B capex, I think the large, the material difference that will actually take place is the rapid build-out on the data center side.

Gopal Vittal: I think on the B2B CapEx, I think the material difference that will actually take place is the rapid build-out on the data center side. On cloud, we already finished the investments in the first round across the three regions that we operate. As it fills out, we will keep adding. That's a modular investment. The data center will be lumpy as the build or large tracts of land are acquired. That will sort of show up over the coming quarters. Let me just finish up the point on the homes. I think Shashank has already alluded to it. The fact is that there was poor acquisition quality that's been tightened substantially, and therefore, that has led to a reduction in the customer adds.

Speaker #4: On cloud, we have already finished the investments in the first round across the three regions that we operate in. And as it fills out, we will keep adding.

Speaker #4: That's a modular investment. The data center will be lumpy as the build or large tracts of land are acquired. So that will sort of show up over the coming quarters.

Speaker #4: And let me just finish up the point on the Homes. I think Shashwath has already alluded to it. The fact is that there were four acquisitions where the quality has been tightened substantially.

Speaker #4: And therefore, that has led to a reduction in the customer adds. We're already seeing traction in the last couple of weeks on this being repaired, because this was obviously a short-term blip.

Gopal Vittal: We're already seeing traction in the last couple of weeks on this being repaired, because this is obviously a short-term hit, but it at least builds the business for the future. We believe that we should start seeing momentum coming back from here onwards. Where it ends up, we'll look at. On the data side, it's just there's a lot of refurbished phones that are still being circulated. That number has gone up with the inflation. We see strong sub-additions. Over time, how this inflation impacts the customer wallet is yet to be seen. At this point, we see no impact of that.

Speaker #4: But at least it builds the business for the future. And we believe that we should start seeing momentum coming back from here onwards. And where it ends up, we'll look at.

Speaker #4: On the data side, it's just that there are a lot of refurbished phones that are still being circulated. That number has gone up with the inflation.

Speaker #4: So we see strong sub-additions. But over time, how this inflation impacts the customer wallet is yet to be seen. But at this point, we see no impact on that.

Speaker #3: Got it. Thank you, and all the best.

Sumangal Nevatia: Got it. Thank you, and all the best.

Speaker #1: The next question comes from Mr. Gaurav Ratheria. Mr. Ratheria, you may please unmute your side, introduce yourself, and ask your question now.

Moderator: The next question comes from Mr. Gaurav Rateria. Mr. Rateria, you may please unmute your side, introduce yourself, and ask your question now.

Operator: The next question comes from Mr. Gaurav Rateria. Mr. Rateria, you may please unmute your side, introduce yourself, and ask your question now.

Speaker #3: Hi, this is Gaurav from Morgan Stanley. I have a couple of questions. My first is on your B2B portfolio. Is it fair to say the largest TAM there will be for the cloud business?

Gaurav Rateria: Hi, this is Gaurav from Morgan Stanley. I have a couple of questions. My first is on your B2B portfolio. Is it fair to say the largest TAM there will be for the cloud business? What has been our USP to win those 30-plus customers that you talked about? At what point in time it will start making a difference to the overall growth rate in the portfolio? Second question is around home. Is there a market share target that you're looking at from a FWA perspective? I know that you look at the consolidated home broadband portfolio as a one portfolio, including FWA and the fiber, right? Is there a target market share that you're looking at, or you will start caring about the market share below a certain threshold? The last question is on your Airtel Finance portfolio.

Speaker #3: What has been our USP to win those 30-plus customers that you talked about? And at what point in time will it start making a difference to the overall growth rate in the portfolio?

Speaker #3: Second question is around Home. Is there a market share target that you're looking at from an FWA perspective? I know that you look at the consolidated Home Broadband portfolio as one portfolio, including FWA and fiber, right?

Speaker #3: But is there a target market share that you're looking at, or will you start caring about the market share below a certain threshold? And the last question is on your Airtel Finance portfolio.

Speaker #3: How are you trying to manage the conflict, if at all, with your other partners that you have in the Airtel Finance app versus your own NBFC, which has also become one of the partners in your business?

Gaurav Rateria: How are you trying to manage the conflict, if at all, with your other partners that you have in the Airtel Finance app versus your own NBFC, which is also becoming one of the partners in your business? Thank you.

Speaker #3: Thank you.

Speaker #4: Yeah, I think on the B2B side, we've had a lot of lessons learned in the last few months as we've gone out to the market.

Gopal Vittal: Yeah. I think on the B2B side, we've had a lot of lessons learned the last few months as we've gone out to the market. I think the first lesson is that the decision-making in a business like this has longer gestation. The reason is quite simple. These are important workloads, and for customers to move from, whether it is the premise or whether it is repatriating from a hyperscaler cloud, or whether it is to move from a private co-located cloud that they have, the integration effort and the task involved is quite high. The second, of course, is that if you are already on a different cloud player, then sometimes you have egress costs which are high, which also becomes a barrier. The gestation period for a decision is large.

Speaker #4: I think the first lesson is that the decision-making in a business like this has a longer gestation. And the reason is quite simple: these are important workloads.

Speaker #4: And for customers to move—whether it is the premise, or whether it is repatriating from a hyperscaler cloud, or whether it is to move from a private co-located cloud that they have—the integration effort and the tasks involved are quite high.

Speaker #4: The second, of course, is that if you are already on a different cloud player, then sometimes you have egress costs, which are high, which also becomes a barrier.

Speaker #4: So the gestation period for a decision is large. The second is that we find that commercialization, which really is a function of the ability to move those workloads—because a lot of this gets paid on a per-use basis—is a muscle that needs to be built.

Gopal Vittal: The second is that we find that commercialization, which really is a function of the ability to move those workloads because a lot of this gets paid on a per-use basis, is a muscle that needs to be built. I think those are the two lessons. The third lesson is how do you package this and bundle this really intelligently? Where we are seeing traction is around simple propositions which can be easily bought. For example, disaster recovery, backup as a service, storage as a service, video surveillance as a service. These are where we've won a lot of the deals that we've won over the last quarter. The one place where the deals are large is the need for sovereign clouds where there are more sensitive workloads.

Speaker #4: And I think those are the two lessons. The third lesson is, how do you package this and bundle this really intelligently? So, where we are seeing traction is around simple propositions which can be easily bought.

Speaker #4: For example, disaster recovery, backup as a service, storage as a service, and video surveillance as a service. These are areas where we've won a lot of the deals that we've secured over the last quarter.

Speaker #4: The one place where the deals are large is the need for sovereign clouds, where there are more sensitive workloads. This is largely in the regulated spheres or in the PSU spheres.

Gopal Vittal: This is largely in the regulated sphere or in the PSU sphere, and these are the areas where a lot of the certification work that is going on is underway. Finally, what the business needs is it needs to be incubated separately. The model that we've got is that the incubation is being done within the business. We are now trying to build a top-notch talent group within that business to actually build it, but yet depend on the B2B go-to-market teams to open the door so that all of the rest of the stuff on the technical sales and solution architecting can be done by the cloud team.

Speaker #4: And these are the areas where a lot of the certification work that is going on is underway. And finally, what the business needs is that it needs to be incubated separately, and the model that we've got is that the incubation is being done within the business.

Speaker #4: We are not trying to build a top-notch talent group within that business to actually build it, but rather depend on the B2B go-to-market teams to open the doors, so that all of the rest of the work on technical sales and solution architecting can be done.

Speaker #4: By the cloud team. On Airtel Finance, yes, you can always argue there will be a perceived conflict, but we don't believe there is any conflict.

Gopal Vittal: On Airtel Finance, yes, you can always argue there will be a perceived conflict, but we don't believe there is any conflict, because even if you look at some of the very large NBFCs in India, you do find that they also have an LSP or a storefront, and they work with partners. Then there are also obviously some RBI regulations which dictate the way that we need to operate within the LSP segment, and therefore we will abide by that and make sure that we are totally meeting all of the compliance requirements that the business needs. We do not set a target for FWA. We only set a target for home broadband. We don't believe that we should have a target for a technology. We believe we have a target for a customer and a business, and that is really our focus.

Speaker #4: Because even if you look at some of the very large NBFCs in India, you do find that they also have an LSP or a storefront.

Speaker #4: And they work with partners. So we are -- and then there are also, obviously, some RBI regulations which dictate the way that we need to operate within the LSP segment.

Speaker #4: And therefore, we will abide by that and make sure that we are totally meeting all of the compliance requirements that the business needs. We do not set a target for FWA.

Speaker #4: We only set a target for home broadband, and we don't believe that we should have a target for a technology. We believe we should have a target for a customer and a business.

Speaker #4: And that is really our focus.

Gaurav Rateria: Thank you.

Speaker #3: Thank you.

Speaker #1: The next question comes from Aditya Suresh. Mr. Suresh, you may please unmute your side. Please introduce yourself and ask your question now.

Moderator: The next question comes from Aditya Suresh. Mr. Suresh, you may please unmute your side, introduce yourself and ask your question now.

Operator: The next question comes from Aditya Suresh. Mr. Suresh, you may please unmute your side, introduce yourself and ask your question now.

Speaker #3: Yeah, thank you. Two questions. First, on Africa—so, Gopal, maybe in very broad terms, given your thrust in the Africa business, can you maybe speak about what sort of contribution you see Africa scaling to over the next, say, three to five years?

Aditya Suresh: Thank you. Two questions. The first one, Africa. Gopal, maybe in very broad terms, given your trust in the Africa business, could you maybe speak about what sort of contribution you see Africa scaling to over the next, say, 3 to 5 years, whether it be EBITDA, invested capital, any other frame of reference you'd like to use? The second question is something we've tried to ask before, but this one will be return on average capital employed. Per your kind of data pack, we're now above 20%. As you kind of drive your top line, there are several levers, as you've pointed out. Is there any reason why you think that the ROAC would not expand at least 500 basis points over the next 3 years? Thank you.

Speaker #3: Whether it be a bit of investor capital, or any other frame of reference you'd like to use? The second question is something we've tried to ask before, but this won't be a return on average capital employed.

Speaker #3: Per your kind of data pack, we're now above 20%. As you can drive your top line and there are several levers, as you've pointed out, is there any reason why you think that the ROAC would not expand at least 500 basis points over the next three years?

Speaker #3: Thank you.

Gopal Vittal: On Africa, like I've said, I think the structural factors that are prevalent in the continent make for a very compelling opportunity for our business. We're very excited about the fact that the business is now on a sustained momentum of 20% plus CAGR growth. We believe the headroom for growth continues to be high. My sense is that all of the things that we have learnt as a group are now being cohesively driven. So whether it's the Warren Buffett program, whether it's our technology platforms being transferred, whether it's talent fungibility, whether it is procurement, all of these are now deeply embedded into Africa. Over the last 18 months, Soumen and I have worked very closely with the Africa team to make sure that all of this is now very deeply embedded. You can see the results of that already translating into the marketplace.

Speaker #4: On Africa, I think, like I've said, the structural factors that are prevalent on the continent make for a very, very compelling opportunity for our business.

Speaker #4: And we're very excited about the fact that the business is now on a sustained momentum of 20% plus CAGR growth. We believe the headroom for growth continues to be high.

Speaker #4: And my sense is that all of the things that we have learned as a group are now being cohesively driven. So whether it’s the War on Waste program, whether it’s the technology platforms being transferred, whether it’s talent fungibility, whether it is procurement, all of these are now deeply embedded into Africa.

Speaker #4: And over the last 18 months, Charmaine and I have worked very closely with the Africa team to make sure that all of this is now very, very deeply embedded.

Speaker #4: And you can see the results of that already translating into the marketplace. I think the step-up in growth is because we bring the same rigor and the same de-averaging that we've seen work so very well in India.

Gopal Vittal: I think the step-up in growth is because we bring the same rigor and the same de-averaging that we've seen work so very well, in India over the last few years. I mean, suffice it to say that Africa, we expect it to punch above its weight. Today, if you look at the contribution of the Africa business to our portfolio, we expect that the contribution to growth will be substantially higher than the base contribution to the business. Which means that the contribution of Africa will keep growing in the overall portfolio. The second thing I would say is that the investments into Africa will continue to step up. We've already stepped it up, as you know. That said, remember, Africa operates with a very different environment because the market structure is typically, two to three players. In most markets, it's two players.

Speaker #4: Over the last few years, I mean, suffice it to say that Africa—we expect it to punch above its weight. So today, if you look at the contribution of the Africa business to our portfolio, we expect that the contribution to growth will be substantially higher than the base contribution to the business.

Speaker #4: Which means that the contribution of Africa will keep growing in the overall portfolio. And the second thing I would say is that the investments into Africa will continue to step up.

Speaker #4: We've already stepped it up, as you know. That said, remember Africa operates in a very different environment because the market structure is typically two to three players in most markets.

Speaker #4: It's two players. In some markets, it's three. Spectrum is quite cheap. You get large quant pools of spectrum, and that means your investment really is on the network, it's on transport.

Gopal Vittal: In some markets, it's three. Spectrum is quite cheap. You get large pond pools of spectrum, that means that your investment really is on the network, is on transport, because in some countries it's landlocked, so you need to build a lot of fiber. That's where the investment is going. Of course, there is also investment going in the homes business. On return on capital, I think, I would just simply say that, look, our focus right now is if we can continue to grow the business, extract operating leverage, those are outcomes that come out, we don't set those as targets because there are different ways of actually meeting that, including making short-term decisions on reducing CapEx. That is something that we don't do as a business.

Speaker #4: Because, in some countries, it's landlocked, so you need to build a lot of fiber. That's where the investment is going. And, of course, there is also investment going into the homes business.

Speaker #4: On return on capital, I think I would just simply say that, look, our focus right now is: if we can continue to grow the business and extract operating leverage, then those are outcomes that will follow.

Speaker #4: And we don't set those as targets because there are different ways of actually meeting that, including making short-term decisions on reducing capex. And that is something that we don't do as a business.

Speaker #4: So, we will fund whatever is required to grow this business. Our focus is growth, and yet operate in a fiscally prudent way—on both cost as well as capex spend.

Gopal Vittal: We will fund whatever is required to grow this business, our focus is growth, and yet, operate in a fiscally prudent way on both cost as well as CapEx spend so that we continue to drive growth across our portfolio.

Speaker #4: So that we continue to drive growth across our portfolio.

Speaker #3: Thank you.

Aditya Suresh: Thank you.

Speaker #1: The next question comes from Mr. Manish Adokia. Mr. Adokia, you may please unmute your side. Please introduce yourself and ask your question now.

Moderator: The next question comes from Mr. Manish Adukia. Mr. Adukia, you may please unmute your side, introduce yourself and ask your question now.

Operator: The next question comes from Mr. Manish Adukia. Mr. Adukia, you may please unmute your side, introduce yourself and ask your question now.

Speaker #3: Yes, hi. Good afternoon. This is Manish Adokia from Goldman Sachs. Thank you for taking my questions. I have two questions, one on India and one on Africa.

Manish Adukia: Yes. Hi, good afternoon. This is Manish Adukia from Goldman Sachs. Thank you for taking my questions. I have two questions, one on India and one on Africa. On India first, Shashwat, going back to your earlier comments around ARPU, that in the medium term, you do see enough headroom for growth from organic levers, and it's only maybe in the long term or maybe over long term, you do see the pricing architecture get resolved. First part of the question is, are you suggesting that in your own opinion assessment, in the near term, you don't see that pricing architecture get corrected and all growth in ARPU will be organic and over maybe a slightly longer time period, you could see that pricing architecture correct?

Speaker #3: On India, first. And Shashith, going back to your earlier comments around ARPU, in the medium term, you do see enough headroom for growth from organic levers, and it’s only maybe in the long term, or maybe over the long term, that you see the pricing architecture get resolved.

Speaker #3: So, first part of the question is: are you suggesting that, in your own opinion or assessment, in the near term you don't see that pricing architecture get corrected?

Speaker #3: And all growth in ARPU will be organic, and over maybe a slightly longer time period, you could see that pricing architecture correct. And unlike in the past, where we used to see, maybe, let's say, a tariff hike every couple of years, it's safe to say that now we may be in a more infrequent tariff hike cycle.

Manish Adukia: Unlike in the past where we used to see maybe, let's say, a tariff hike every couple of years, is it safe to say that now we may be in a more infrequent tariff hike cycle? The second related question on that particular topic is, again, going on return on capital for the India business now at mid to high teens, post-tax return on capital. I get the part about pricing architecture not being correct, but why, when you're already seeing decent growth in the business with good operating leverage, do you really need price hike at all when your organic return on capital continues to improve quarter on quarter? That's my first question. I'll come back on the Africa question after that. Thank you.

Speaker #3: And the second related question on that particular topic is, again, regarding return on capital for the India business, which is now at mid to high teens post-tax return on capital.

Speaker #3: And I get the part about the pricing architecture not being correct. But why, when you're already seeing decent growth in the business with good operating leverage, do you really need a price hike at all when your organic return on capital continues to improve, quarter on quarter?

Speaker #3: So that's my first question. I'll come back to the Africa question after that. Thank you.

Speaker #4: Go ahead, Shashith. I will just comment very briefly on the pricing, and Shashith, I'll hand over to you. I just want you to know that the most important thing is to repair the architecture.

Gopal Vittal: Go ahead, Shashwat. I will just comment very briefly on pricing and Shashwat, I will hand over to you.

Soumen Ray: Yeah.

Gopal Vittal: I just want you to know that the most important thing is to repair the architecture. When we talk about this repair or we talk about lack of repair, it is actually the architecture, which means that for a very low level of pricing, you get unlimited data, and that means ARPU is capped. That to me is not a healthy way to operate because if you look at. We have talked about this before. Any market that you look at, you have an architecture which goes from small, medium, large to extra large. If you just operate with a more sensible price architecture, my view is in the next five to seven years, you will see sustained growth just on account of ARPU as India gets more affluent, et cetera, of 4% or 5%, maybe slightly higher.

Speaker #4: So when we talk about disrepair or we talk about lack of repair, it is actually the architecture, which means that for a very low level of pricing, you get unlimited data.

Speaker #4: And that means ARPU is capped. That, to me, is not a healthy way to operate. Because if you look at—and we've talked about this before—any market that you look at, you have an architecture which goes from small, medium, large to extra large.

Speaker #4: And so, if you just operate with a more sensible price architecture, my view is, in the next five to seven years, you will see sustained growth just on account of ARPU.

Speaker #4: As India gets more affluent, et cetera, of four to five percent, maybe slightly higher. That, I think, will be a good place. And to go.

Gopal Vittal: That I think will be a good place to go, and there is no need to touch the entry-level pricing, because the entry-level pricing I think is good enough. I think the way that we now need to think about price architectures in industry needs to fundamentally change over the next few years. Shashwat, over to you.

Speaker #4: And there is no need to touch the entry-level pricing, because the entry-level pricing, I think, is good enough. And so I think the way that we now need to think about price architectures in the industry needs to fundamentally change.

Speaker #4: Over the next few years. Shashith, over to you.

Speaker #2: Yeah, Gopal, nothing much to add. I think that's the reality, and I think how this plays out in the future is very difficult to comment on, honestly.

Shashwat Sharma: Gopal, nothing much to add. I think that's the reality, and I think how this plays out in the future is very difficult to comment on, honestly. As soon as we can correct this architecture, it'd be great, but it needs us. We can't do it single-handedly, I think that's the larger point. We'll have to watch this. No, I think nothing else to add here.

Speaker #2: We would, as soon as we can, correct this architecture. It would be great. But it means we can't do it single-handedly. I think that's the larger point.

Speaker #2: So we'll have to watch this. So, no more. I think nothing else to add here.

Speaker #3: Sure. Thank you.

Shashwat Sharma: Sure. Thank you.

Speaker #2: Rosi, Gopal, do you want to take up? Hi, Rosi. Why should you, therefore, worry about pricing?

Shashwat Sharma: Gopal, you want to take up a high ROCE, why should we therefore worry about pricing?

Speaker #4: No, I mean, like I said, I think there are outcomes. And what's more important is to have a more sensible architecture.

Gopal Vittal: No, as I said, I think there are outcomes, and what's more important is to have a more sensible architecture.

Speaker #3: Sure. No, helpful. My second question is on Africa and partly also related to Indus. Now, Indus today is expanding to three markets in Africa. From a Bharti Airtel perspective, or Airtel Africa perspective, first, can you just talk about some of the advantages that you would get at Airtel Africa by having Indus?

Manish Adukia: Sure. No, helpful. My second question on Africa, and partly also related to Indus. Now, Indus today is expanding to three markets in Africa. From a Bharti Airtel perspective or Airtel Africa perspective, first, can you just talk about some of the advantages that you would get at Airtel Africa by having Indus, and how does that impact Airtel Africa's own OpEx and CapEx by having Indus versus using somebody else's towers? Again, a related question on that is, Indus is starting off with three markets in Africa, but is it safe to say that over a period of time, and maybe given whatever feedback you get from your first three markets, that over a period of time, Indus should logically also expand to the remaining markets where you operate in Africa?

Speaker #3: And how does that impact Airtel Africa's own opex and capex by having Indus, versus using somebody else's towers? And again, a related question on that is, Indus is starting off with three markets in Africa.

Speaker #3: But is it safe to say that, over a period of time—and maybe given your, or let's say, whatever feedback you get from your first three markets—that over a period of time, Indus should logically also expand to the remaining markets where you operate in Africa?

Speaker #4: Gopal, go ahead. Yeah.

Gopal Vittal: Soumen, go ahead.

Soumen Ray: Yeah. Manish, first of all, yes, there are a lot of benefits on Indus going into Africa. If you see the Africa TowerCo industry, very high costs, very high rentals, and so on and so forth. Indus presents a very viable alternative to the current players because they bring the low-cost architecture which has been developed in India. They replicate that. Also, whatever improvements, whether it is on construction, whether it is on digitization, whether it is on energy management, the observability of the performance of the towers, everything gets immediately replicated to Africa from day one. It is certainly better for Airtel Africa in terms of OpEx performance, both on rentals, IPCs, as well as possibly even on energy, and the sheer observability, which will tell them to get more efficient.

Speaker #2: So, Manish, first of all, yes, there are a lot of benefits of Indus going into Africa. If you see the Africa tower co-industry, very high costs, very high rentals, and so on and so forth.

Speaker #2: Indus presents a very viable alternative to the current low-cost architecture, which has been developed in India. They replicate that. Also, whatever improvements—whether it is on construction, whether it is on digitization, whether it is on energy management, the observability of the performance of the towers—everything gets immediately replicated to Africa from day one.

Speaker #2: So, it is certainly better for Africa—Airtel Africa—in terms of opex performance, both on rentals, IPCs, as well as possibly even on energy.

Speaker #2: And the sheer observability, which will tell them to get more efficient. About getting into more countries, that's a future thing. I can't comment. But if this goes well and they're able to manage in a very—and remember, it's a very lean structure.

Soumen Ray: About getting into more countries, that's a future thing, I can't comment, but if this goes well and they're able to manage in a very. Remember, it's a very lean structure. Indus is not building a whole organizational setup. They're running it very lean with remote monitoring. If that works, why not to some other markets as well? As of now, we are focusing on getting it right on these three markets, but it's a very exciting opportunity.

Speaker #2: Indus is not building a whole organizational setup. They're running it very lean, with remote monitoring. So if that works, why not in some other markets as well?

Speaker #2: But as of now, we are focusing on getting it right in these three markets. But it's a very, very exciting opportunity.

Speaker #3: Thank you for answering my questions. All the best.

Manish Adukia: Thank you for answering my questions. All the best.

Speaker #1: The next question comes from Pranav Kshatriya. Mr. Kshatriya, you may please unmute your side. Please introduce yourself and ask your question now.

Moderator: The next question comes from Pranav Kshatriya. Mr. Kshatriya, you may please unmute your side, introduce yourself, and ask your question now.

Operator: The next question comes from Pranav Kshatriya. Mr. Kshatriya, you may please unmute your side, introduce yourself, and ask your question now.

Speaker #5: Yeah. Hi, this is Ali from Motilal Oswal Mutual.

[Analyst] (Motilal Oswal Mutual Fund): Yeah. Hi, this is Ali from Motilal Oswal Mutual Fund.

Speaker #3: Hello. Yeah, this is Pranav Kshatriya from AMK Global. I have three questions. First question is regarding your commentary about FW, wherein you said that increased memory prices are sort of impacting the unit economics of that business.

Pranav Kshatriya: Hello. Yeah. This is Pranav Kshatriya from Emkay Global. I have three questions. First question is your commentary about FWA, wherein you said that increased memory prices are sort of impacting the unit economics of that business. Memory/chip prices have been pretty high, and they might continue to be so, whereas we are seeing the competition sort of expanding. Can you quantify how much is the impact of the customer acquisition because of chip prices going up? Would you sort of take this pause for the memory prices to correct, or you want to react if the competition is doing more, you might want to spend more and get the customers? Second question is on the international roaming. In the previous quarter, you have hinted that West Asia crisis led to certain decline in the international roaming.

Speaker #3: So, memory and chip prices have been pretty high, and they might continue to be so, whereas we are seeing the competition sort of expanding. Can you quantify how much is the impact on customer acquisition because of chip prices going up?

Speaker #3: And how—I mean, would you sort of take this pause for the memory prices to correct, or would you want to react if the competition is doing more? You might want to spend more and get the customers?

Speaker #3: The second question is on international roaming. In the previous quarter, you hinted that the West Asia crisis led to a certain decline in international roaming.

Speaker #3: How has that trended, and is it normalized in this quarter, or should we expect some improvement that could happen in the next quarter also because of that?

Pranav Kshatriya: How that has trended, is it normalized in this quarter, or there should be some improvement which can happen in the next quarter also because of that? My third question is regarding, Shashwat, your comment on the AI. You said that you are using an endpoint device which does inferencing locally. Does that mean that you have developed some sort of a small language model which is run on the field engineer's device, and they work for the inferencing accordingly? Those are my three questions. Thank you.

Speaker #3: My third question is regarding Shashwith, your comment on the AI. You said that you are using an endpoint device which does inferencing locally. Does that mean that you have developed some sort of small language model which is run on the field engineer's device, and they work for the inferencing accordingly?

Speaker #3: Those are my three questions. Thank you.

Shashwat Sharma: Gopal, any thoughts?

Speaker #4: Yeah, go ahead.

Soumen Ray: Yeah, go ahead.

Shashwat Sharma: Okay. I think first of all, on this AI piece and international roaming, there are straightforward answers. I think, yes, on the AI piece, we are

Speaker #2: So, I think, first of all, on this AI piece, I'll go—and international roaming, we have straightforward answers. I think, yes. On the AI piece, we are putting a small language model, which works on the endpoint device of the engineer, which runs on a regular handset.

Shashwat Sharma: Putting a small language model which works on the endpoint device of the engineer, which runs on a regular handset. This is a breakthrough our engineering team, which we are using in-house. Internationally, we are seeing improvement. I think, obviously from previous quarter, we have started seeing some repair improvement of international travels. Nothing more to report there beyond this. On FWA, I do want to call out that the customer acquisition number and memory prices are, in a way, we have to look at it separately because the numbers we are seeing is linked to the correction of quality of acquisition and the acquisition prices that we have. It's also coincided with the phase where memory prices have gone up and therefore we are finding it much better to run, one, fiber has much better economics, lesser churn, lesser cost.

Speaker #2: And this is a this is a breakthrough of our engineering team, which we have which we are using in-house. On international roaming, we are seeing improvement.

Speaker #2: I think, obviously, from the previous quarter, we have started seeing some repair and improvement in international travel. Nothing more to report there. Beyond this, on FW, I do want to call out that the customer acquisition numbers and memory prices are, in a way, something we have to look at separately, because the numbers we are seeing are linked to the correction of the quality of acquisition and the acquisition prices that we have.

Speaker #2: It's also coincided with a phase where memory prices have gone up. And therefore, we are finding it much better to run one. Get fiber has much better economics, lesser churn, lesser cost.

Speaker #2: Second is you have on FWA, and we need to actually look at redesigning there as unit economics of this also works better. So, I think there's a plethora of work going on to get these unit economics right.

Shashwat Sharma: Second is you have on FWA. We need to actually relook at redesigning better unit economics of this also works better. I think there's a plethora of work going on to get this unit economics right. I'm just saying, we should not correlate memory prices to the net add number. I think it's important.

Speaker #2: But I'm just saying, we should not correlate memory prices to the net adds number, I'm guessing, in the quarter.

Speaker #3: Just to follow up on that, does that mean the impact is on FW, and the fiber rollout does not really get impacted? Because fiber also requires some of those memory chips, and...

Pranav Kshatriya: Just to follow up on that, does that mean that the impact is on FWA and the fiber rollout does not really get impacted because fiber also requires some of those memory chips?

Gopal Vittal: Let me just come in here, Pranav. I think we are very consistent that for us the first port of call is fiber. We've said this for the last few years. Fiber has actually greater longevity, greater permanence, concurrency, uplink, down-link works. The churn tends to be lower because it just works brilliantly, right? That's long-term, fiber is the best place to actually go. Second point I make is the market is fundamentally in 400 cities, right? Almost 95% odd of the market is in 400 cities. In these 400 cities, we are there with fiber. We are actually doubling down on fiber and the memory prices that have gone up on the fiber side with copper and little bit on this router is actually modest and we are fine to actually absorb that and move on.

Speaker #4: Yeah, let me just come in here. Pranav, I think we have been very consistent that for us, the first port of call is fiber. We've said this for the last few years.

Speaker #4: Fiber actually provides greater longevity, greater permanence, concurrency, uplink, and downlink capabilities. The churn tends to be lower because it just works brilliantly, right? And that's why, long-term, fiber is the best place to actually go.

Speaker #4: Second point to make is the market is fundamentally in 400 cities, right? And almost 95-odd percent of the market is in these 400 cities.

Speaker #4: In these 400 cities, we are there with fiber. So we are actually doubling down on fiber, and the memory prices that have gone up on the fiber side with copper and a little bit on this router is actually modest.

Speaker #4: And we are fine to actually absorb that and develop. On the fixed wireless access, there are two challenges. One is installing it in the wrong place.

Gopal Vittal: On the fixed wireless access there are two challenges. One is installing it in the wrong place actually leads to problems. You then have poor experience. Installing it with poor quality of acquisition leads to a double whammy because now you have to run around collecting that box back rather than actually putting it in the right place and sustaining the business. For a variety of reasons, we have decided to pivot to fiber and make sure that fixed wireless access only goes where fiber is not accessible. That is really the reason that there has been a slowdown in the fixed wireless side of the business, which as we pivot to fiber and get FWA into the right locations, we are seeing momentum come back. I think that is really the bottom line on this.

Speaker #4: Actually, it leads to problems, so you then have a poor experience. Installing it with poor quality of acquisition leads to a double whammy, because now you have to run around collecting that box back rather than actually putting it in the right place and sustaining the business.

Speaker #4: So, for a variety of reasons, we have decided to pivot to fiber and ensure that fixed wireless access is only used where fiber is not accessible.

Speaker #4: That is really the reason that there has been a slowdown in the fixed wireless side of the business. As we pivot to fiber and get FWA into the right locations, we are seeing momentum come back.

Speaker #4: I think that is really the bottom line—the bottom line on this. And just to add to the endpoint piece, fundamentally, what is happening is, we were spending, let's say, 30–35 crores on these workloads being run on the cloud.

Gopal Vittal: Just to add to what Shashwat said on the endpoint piece, fundamentally what is happening is we were spending, let's say, INR 30, 35 crores on these workloads being run on cloud. Now that it is being done at the device through the small language model on the device itself, the cost has gone down to zero. I think it's a very big breakthrough and we feel that actually this can be extended into our stores and many other areas. That is really an additional color I wanted to provide.

Speaker #4: Now that it is being done on the device through the small language model, on the device itself, the cost has gone down to zero.

Speaker #4: So, I think it's a very big breakthrough, and we feel that actually this can be extended into our stores and many other areas. So, that is really an additional color I wanted to provide.

Speaker #3: Oh, that's excellent. Thank you so much for the comprehensive answers, and I wish you all the very best. Thank you.

Pranav Kshatriya: That's excellent. Thank you so much for comprehensive answers and wish you all the very best. Thank you.

Speaker #1: Thank you very much, everyone. I would now like to remind the participants to kindly stay connected on the call for the next session on Bharti Hexacom.

Moderator: Thank you very much, everyone. I would now like to remind the participants to kindly stay connected on the call for the next session on Bharti Hexacom. I would now like to pass over to Gopal for his closing remarks on Bharti Airtel.

Operator: Thank you very much, everyone. I would now like to remind the participants to kindly stay connected on the call for the next session on Bharti Hexacom. I would now like to pass over to Gopal for his closing remarks on Bharti Airtel.

Speaker #1: I would now like to pass over to Gopal for his closing remarks on Bharti Airtel.

Speaker #4: Oh, thank you very much. I think it's been—thank you for all the questions. And I look forward to seeing you again next quarter.

Gopal Vittal: Well, thank you very much. Thank you for all the questions and look forward to seeing you again next quarter.

Speaker #1: Thank you very much, Gopal. With this, I would now like to hand over the call to Mr. Somendre for his opening remarks on Bharti Hexacom.

Moderator: Thank you very much, Gopal. With this, I would now like to hand over the call to Mr. Soumen Ray for his opening remarks on Bharti Hexacom.

Operator: Thank you very much, Gopal. With this, I would now like to hand over the call to Mr. Soumen Ray for his opening remarks on Bharti Hexacom.

Speaker #5: Thank you, Benny. Good afternoon, everyone. Welcome to the Bharti Hexacom Q1 FY27 earnings call. I have with me Karthik and Naval on the call.

Soumen Ray: Thank you, Vaidehi. Good afternoon, everyone. Welcome to the Bharti Hexacom Q1 FY 2027 earnings call. I have with me Karthik and Naval on the call. Let me start with a quick update of our Q1 performance. We delivered another quarter of strong performance with revenue at INR 2,510 crore, growing 4% sequentially. EBITDA for the quarter came in at about INR 1,210 crore with a margin of 48.2%. We ended the quarter with mobile customer base of 29 million with net customer additions for the quarter coming in at about 210,000. Smartphone customer additions were strong at 344,000. ARPU for the quarter was INR 259. We benefited from one extra day as well. Our homes, office, and other businesses continues to stream strong momentum with net adds of 75,000 resulting in revenue growth above 8% sequentially. Our CapEx is directed towards 5G densification, network modernization, and growing our homes and SME business.

Speaker #5: Let me start with a quick update of our Q1 performance. We delivered another quarter of strong performance, with revenue at ₹2,510 crore, growing 4% sequentially.

Speaker #5: And the tally for the quarter came in at about ₹1,210 crore, with a margin of 48.2%. We ended the quarter with a mobile customer base of 29 million, with net customer additions for the quarter coming in at about 210,000.

Speaker #5: Smartphone customer additions were strong at 344,000. R2 for the quarter was 259, which benefited from one extra day as well. Our homes, office, and other businesses continue to show strong momentum, with net adds of 75,000, resulting in revenue growth of about 8% sequentially.

Speaker #5: Our capex is directed towards 5G densification, network modernization, and growing our homes and IPTV business. Our operating free cash generation, which is EBITDA minus capex, came in at about ₹830 crores.

Soumen Ray: Our operating free cash generation, which is EBITDA minus CapEx, came in at about INR 830 crore. Balance sheet remains robust with a net debt excluding leases at about INR 960 crore. A net debt excluding leases to EBITDA ratio improving to 0.2. That was a brief update of Q1. I would now hand over to Vaidehi for the questions. Over to you, Vaidehi.

Speaker #5: Balance sheet remains robust, with net debt excluding leases at about ₹960 crores. Our net debt excluding leases to EBITDA ratio has improved to 0.2.

Speaker #5: That was a brief update of Q1. I would now hand over to Vaidehi for the questions. Over to you, Vaidehi.

Speaker #1: Thank you, Soumen. With this, we will now begin the Q&A interactive session. Due to time constraints, we would request that you limit the number of questions to two per participant to enable more participation.

Moderator: Thank you, Soumen. With this, we will now begin the Q&A interactive session. Due to time constraints, we would request if you could limit the number of questions to two per participant to enable more participation. Interested participants, please may click on raise hand option on the Zoom application to join the Q&A queue. With this, the first question comes from Mr. Vivekanand Subbaraman. Mr. Subrahman, you may please unmute your side, introduce yourself, and ask your question now.

Operator: Thank you, Soumen. With this, we will now begin the Q&A interactive session. Due to time constraints, we would request if you could limit the number of questions to two per participant to enable more participation. Interested participants, please may click on raise hand option on the Zoom application to join the Q&A queue. With this, the first question comes from Mr. Vivekanand Subbaraman. Mr. Subrahman, you may please unmute your side, introduce yourself, and ask your question now.

Speaker #1: Interested participants, please click on the 'Raise Hand' option on the Zoom application to join the Q&A queue. With this, the first question comes from Mr. Vivekanand Subraman.

Speaker #1: Mr. Subraman, you may please unmute your side. Introduce yourself and ask your question now.

Speaker #3: Yeah. Hi, this is Vivekanand from Ambit. Further building on Gopal's commentary with respect to the relevant FWA or FTTH homes market being 400 cities, how many cities fall in the circles of Bharti Hexacom?

Vivekanand Subbaraman: Hi, this is Vivekananda from Ambit. Further building on Gopal's commentary with respect to the relevant FWA or FTTH homes market being 400 cities, how many cities fall in the circles of Bharti Hexacom, and what is the kind of opportunity in terms of absolute number of homes that you see in Hexacom? That's the first one. The second one, Airtel seems to be stepping up its CapEx in areas like data centers, which is an opportunity that is unavailable for BHL. Are there any areas where you think you can reinvest capital so that you can achieve improved revenue growth versus the industry more from a strategic three, four-year standpoint? Thank you very much.

Speaker #3: And what is the kind of opportunity, in terms of absolute number of homes, that you see in Hexacom? That's the first one. The second one, Airtel seems to be stepping up its capex in areas like data centers, which is an opportunity that is unavailable for BHL.

Speaker #3: Are there any areas where you think you can reinvest capital to achieve improved revenue growth versus the industry, more from a strategic three- to four-year standpoint?

Speaker #3: Thank you very much.

Speaker #5: Thanks, Vivekanand. How many cities of that 400 cities are in these two circles? We can get back to you on that. My sense is it will be close to about 15 or 17 of them.

Soumen Ray: Thanks, Vivekananda. How many cities of that 400 cities are in these two circles, we can get back to you on that. My sense, it would be close to about 15 or 17 of them. What is important is to understand the demographics of these two circles. Northeast is a circle which is large and a difficult terrain. Rajasthan, which is a little more developed than some parts of Northeast, possibly, is also a difficult terrain. Reaching through a combination of wireless and wired line is a very good strategy for these two circles, as opposed to a much more developed circle, like, let's say, Maharashtra or Tamil Nadu. We will be a little more nuanced in these two circles as far as the places where we need to go.

Speaker #5: But what is important is to understand the demographics of these two circles. Now, this is a circle which is large, and a difficult thing.

Speaker #5: Rajasthan, which is a little more developed than some parts of the Northeast, possibly, is also a difficult thing. So reaching through a combination of wireless and wired line is a very good strategy for these two circles.

Speaker #5: As opposed to a much more developed circle like, let's say, Maharashtra or Tamil Nadu. So, we will be a little more nuanced in these two circles as far as the places where we need to go.

Speaker #5: For example, a place like Shiron, which is a part of our portfolio, is extremely developed and represents all the attributes of an aspirational population—reasonable demographic profile, and so on and so forth.

Soumen Ray: For example, a place like Shillong, which is a part of our portfolio, is an extremely developed, and it represents all the attributes of aspirational population, reasonable demographic profile, and so on and so forth. You have to nuance it in that way. Coming to your question of CapEx, I think 5G densification is a big objective that is there. Fiberization continues to remain a big job to be done. My sense is, yes, we do not have the large B2B play which the parent entity has in terms of cloud or more importantly, data center. I think data center is a separate entity. It's just that it gets consolidated in overall India. Data center also does not apply to the telco organization. That's a different entity, a different requirement.

Speaker #5: So, you have to nuance it in that way. Coming to your question of capex, I think 5G densification is a big objective that is there.

Speaker #5: Fiberization continues to remain a big job to be done. So, my sense is yes, we do not have the large B2B play that the parent entity has, in terms of cloud, or more importantly, data center.

Speaker #5: But I think data center is a separate entity. It's just that it gets consolidated in the overall India numbers. Data center also does not apply to the telco organization.

Speaker #5: So that's a different entity, a different requirement. Like it was mentioned in the previous call, Vivekanand, whatever is the ask of the business to maintain a healthy, competitive, and profitable growth, that will be attended to.

Soumen Ray: Like it was mentioned in the previous call, Vivekananda, whatever is the ask of the business to maintain a healthy, competitive, and profitable growth, that will be attended to. As of now, we seem to be in a very comfortable position in terms of net debt to EBITDA. We would like to be there, but if there is a call, we will certainly spend adequate money to drive competitive and profitable growth.

Speaker #5: As of now, we seem to be in a very comfortable position in terms of net debt to EBITDA. We would like to be there, but if there is a call, we will certainly spend adequate money to drive competitive and profitable growth.

Speaker #3: Sure. Thanks, Soumen, for your answers. Just one follow-up. Is the competitive landscape as fierce in Rajasthan and the Northeast, especially when it comes to user acquisition or the Homes business, as it is for the rest of Airtel, or is it very different?

Vivekanand Subbaraman: Sure. Thanks, Soumen, for your answers. Just one follow-up. Is the competitive landscape as fierce in Rajasthan and Northeast, especially when it comes to user acquisition for the homes business, as it is for the rest of Airtel, or is it very different?

Speaker #5: So, to give you a sense, in Rajasthan, it is extremely competitive. First of all, we have a listed entity, which is why we are having this conversation.

Soumen Ray: To give you a sense, in Rajasthan it is extremely competitive. First of all, we have a listed entity, which is why we are having this conversation. The way you look at this business is there are national players who operate in these 22 telecom circles. There is no difference unless a particular operator decides strategically that a circle is not so relevant. That is not the case. The competitive intensity is as much in these circles as it is in any other circle. Having said that, I think in Northeast, we have a very comfortable position in terms of competitively being placed well. Rajasthan is a far more competitively heated market. If you talk about intensity in the ground on customer acquisition, on delivering very high-quality network experience, it is no different from any other circle.

Speaker #5: The way you look at this business is: there are national players who operate in these 22 telecom circles. So, there is no difference unless a particular operator decides strategically that the circle is not so competitive or is not so relevant.

Speaker #5: That is not the case. So, the competitive intensity is as much in these circles as it is in any other circle. Having said that, I think in the Northeast, we have a very, very comfortable position in terms of competitively being placed well.

Speaker #5: Rajasthan is a far more competitively heated market, but if you talk about intensity on the ground in customer acquisition and delivering a very high-quality network experience, it is no different from any other circle.

Speaker #5: It's just that the terrains are a little different, so the solutions are a little unique—especially in the Northeast.

Soumen Ray: It's just that the terrains are a little different, so the solutions are a little unique, especially in Northeast.

Speaker #3: All right. Thank you very much for the detailed answers. All the very best.

Vivekanand Subbaraman: All right. Thank you very much for the detailed answers. All the very best.

Speaker #5: Thank you.

Soumen Ray: Thank you.

Speaker #1: The next question comes from Mr. Rishabh Dhancholia. Mr. Dhancholia, you may please unmute your side. Please introduce yourself and ask your question now.

Moderator: The next question comes from Rishabh Dhancholia. Mr. Dhancholia, you may please unmute your side, introduce yourself and ask your question now.

Operator: The next question comes from Rishabh Dhancholia. Mr. Dhancholia, you may please unmute your side, introduce yourself and ask your question now.

Speaker #2: Hey. Hi. It's Rishabh Dhancholia from HSBC. Thanks to the management for the opportunity. Firstly, on the mobile side, the mobile subscriber net add trends have been relatively weaker this quarter when you compare to historical trends of the company.

Rishabh Dhancholia: Hey, hi. This is Rishabh Dhancholia from HSBC. Thanks to the management for the opportunity. Firstly, on the mobile side, the mobile subscriber net add trends have been relatively weaker this quarter when you compare to historical trends of the company, and also the sequential growth witnessed in pan-India Airtel numbers. Wanted to understand what drove the same, and is there something circle specific that played out this quarter? Also just a follow-up on the home broadband. Given the changes in acquisition policy and the rising chipsets, has management relatively revised its midterm outlook on the home broadband segment growth internally? Any revisions in the internal targets? Thank you.

Speaker #2: And also, the sequential growth witnessed in pan-India Airtel numbers—I want to understand what drove the same, and is there something circle-specific that played out this quarter?

Speaker #2: And also, just a follow-up on the home broadband. Given the changes in acquisition policy and the rising chipsets, has management revised its midterm outlook on the home broadband segment growth internally?

Speaker #2: Any revisions in the internal targets? Thank you.

Speaker #5: Thanks, Rishabh. Rishabh, on the mobile side, I think if you look sequentially over the last, I don't know, maybe 16 to 20 quarters, you would see a certain seasonality in customer additions, both in the industry as well as in each operating company.

Soumen Ray: Thanks, Rishabh. Rishabh, on the mobile, I think if you look sequentially over the last, I don't know, maybe 16, 20 quarters, you would see a certain seasonality in customer acquisitions, both in the industry as well as in each operating company. I think we will leave at that. We see a higher trend of customer acquisitions towards the second half of the year, which has been a demonstrated pattern over the years. Let me focus a little bit more on your home broadband question. See, home broadband continues to remain a very large opportunity, and there is no relenting on trying to seize that opportunity. As was mentioned in the previous call, there are two technologies, and we are giving a home broadband Wi-Fi experience to the customer.

Speaker #5: So I think we will leave it at that. We see a higher trend of customer admissions towards the second half of the year, which has been a demonstrated pattern over the years.

Speaker #5: Let me focus a little bit more on your home broadband question. See, home broadband continues to remain a very large opportunity, and there is no relenting on trying to seize that opportunity.

Speaker #5: As was mentioned in the previous call, there are two technologies. And we are giving a home broadband Wi-Fi experience to the customer. There has been we have found out that there are some reasons why we have to become more tighter in the quality of acquisition.

Soumen Ray: We have found out that there are some reasons why we have to become more tighter in the quality of acquisition. What you see in this quarter is an effect of a correction in the way we acquire customers. There is no fundamental change either in the assumption of how big is the market, two, how we need to gain share, and three, how we need to price our offerings and give converged solutions. Either it is home broadband with content or it is fixed and mobile convergence. Underlying, nothing absolutely has changed. You see a change in this quarter, and I must mention, you will again see unwinding of this change because we've already moved into this. This was the quarter that the change happened, and hence it shows in the numbers.

Speaker #5: So what you see in this quarter is an effect of a correction in the way we acquire customers. There is no fundamental change, either in the assumption of how big the market is, to how we need to gain share, and, three, how we need to price our offerings and give converse solutions. Either it is home broadband with content, or it is fixed and mobile convergence.

Speaker #5: So, underlying, nothing absolutely has changed. You see a change in this quarter, and as mentioned, you will again see unwinding of this change because we've already moved into this.

Speaker #5: This was the quarter where the change happened, and hence, it shows in the numbers. But I must also hasten to add, there are also a lot of positive trends that we are seeing.

Soumen Ray: I must also hasten to add, there are also a lot of positive trends that we have seen. For example, the postpaid penetration has been very low in this quarter. I'm having it from the point of view of quality customers. Postpaid penetration hasn't been very good, and we are seeing those small numbers, but we are seeing a steady growth in the number of postpaid customers getting added quarter-on-quarter. The fundamental underlying principle of whether it is quality customers, whether it is how do we scope out the home market and how do we pursue that, nothing underlying has undergone a change. It's just a bit of change in the go-to-market because of the quality of acquisition.

Speaker #5: For example, the postpaid penetration has been very low in this quarter. I'm coming at it from the point of view of quality customers. Postpaid penetration hasn't been very good.

Speaker #5: And we are seeing those small numbers, but we are seeing a steady growth in the number of postpaid customers getting added quarter on quarter.

Speaker #5: So, the fundamental underlying principle—whether it is quality customers, whether it is how do we scope out the home market and how do we pursue that—nothing underlying has undergone a change.

Speaker #5: It's just a bit of a change in the go-to-market because of the quality of acquisition.

Speaker #2: Thank you. Thank you.

Rishabh Dhancholia: Thank you.

Speaker #1: The next question comes from Mr. Aditya Bansal. Mr. Bansal, you may please unmute your side, introduce yourself, and ask your question now.

Moderator: The next question comes from Mr. Aditya Bansal. Mr. Bansal, you may please unmute your side, introduce yourself, and ask your question now.

Operator: The next question comes from Mr. Aditya Bansal. Mr. Bansal, you may please unmute your side, introduce yourself, and ask your question now.

Speaker #4: Thanks, everyone. This is Aditya Bansal from Muthukalur School. Thanks for taking my question. My first question is around the higher diesel prices. For Exacom, we are actually seeing that the energy costs are lower on a year-over-year basis.

Aditya Bansal: Thanks, everyone. This is Aditya Bansal from Morgan Stanley. Thanks for taking my question. First question is around the higher diesel prices. For Exetel, we are seeing actually the energy costs are actually lower on a Y over Y basis. Can you help us understand what led to this? Is there some timing difference or there are certain efficiencies that have been there in the system?

Speaker #4: Can you help us understand what led to this? Is there some timing difference, or are there certain efficiencies that have been there in the system?

Soumen Ray: I'll hand over to Karthik to answer that.

Speaker #5: I'll hand it over to Karthik to answer that.

Speaker #4: Okay. Hi. Aditya, primarily, one is about the seasonal impact, where solar-based towers are giving us some benefit. And there are also some one-offs in the quarter.

Karthik Balakrishnan: Okay. Hi, Aditya. Primarily, one is about the seasonal impact, which solar-based towers are giving us some benefit, and there are also some one-offs in the quarter. On a trend basis, it's more or less trending in the same direction.

Speaker #4: So, on a trend basis, it's more or less trending the same. And there is no timing lag as such, because diesel prices have gone up partly for the quarter.

Aditya Bansal: There is no timing lag as such, because diesel prices have gone up partly for the quarter.

Karthik Balakrishnan: No.

Speaker #5: Diesel, in terms—it's not the full quarter. It's part of the quarter, and so on and so forth. And you don't empty your tanks completely.

Soumen Ray: The diesel trends, it's not the full quarter, it's part of the quarter and so on and so forth. You don't empty your tanks completely. You do have some stocks of diesel lying in the DG sets, which run for some time. I don't think we have seen the full impact of diesel in the quarter. But as Karthik mentioned, the seasonality allows for more solar energy generation, and we have ramped up our solar sites, which has helped a bit. Underlying sequential trend is more or less flat.

Speaker #5: So, you do have some stocks of diesel lying in the DG sets, which run for some time. I don't think we have seen the full impact of diesel in the quarter.

Speaker #5: But as Karthik mentioned, the seasonality allows for more solar energy generation, and we have ramped up our solar sites, which has helped a bit.

Speaker #5: But the underlying sequential trend is more or less flat.

Speaker #4: The second one is more of a clarification. I just wanted to check if your home broadband addition number that you report also includes the IPTV additions in Exacom?

Aditya Bansal: Second one is more of a clarification. Just wanted to check if your home broadband addition number that you report, does it also includes the IPTV additions in Bharti Hexacom? If yes, can you provide the underlying trend there? Is it similar to Airtel?

Speaker #4: And if yes, can you provide the underlying trend there? Is it similar to Airtel?

Speaker #5: Yeah. So, the home broadband that we sell, there are two kinds of offerings. There is one which includes content, and we also have an offering which excludes content.

Soumen Ray: Yeah. The home broadband that we sell, there are two kinds of offerings. There is one which is including content, and we also have an offering which is excluding content. Based on whatever is bought, because there is no separate segment of digital TV in this company, everything is bundled into home broadband. The customer is not counted twice.

Speaker #5: So based on whatever is bought, because there is no separate segment of digital TV in this company, everything is bundled into home broadband.

Speaker #5: But the customer is not counted twice.

Speaker #4: Sure. In terms of the trend, so we are seeing a Exacom share and overall home broadband for Airtel, that has increased. So whether the calibration that we have done on FWA does it apply also to Exacom or it has been at a lower quantum?

Karthik Balakrishnan: Shantanu.

Aditya Bansal: In terms of the trends, we are seeing like a Bharti Hexacom share in overall home broadband for Airtel, that has increased. Whether the calibration that we have done on FWA, does it apply also to Bharti Hexacom or it has been at a lower quantum? There still healthy trends in terms of Bharti Hexacom on the additions there.

Speaker #4: Because there are still healthy trends in terms of ex-ARPU on the additions there.

Speaker #5: Where we have parts of the market, we have differed based on the quality of acquisition. So the impact of that has been seen, possibly a little less.

Soumen Ray: Various parts of the market behave differently based on the quality of acquisition. The impact of that has been seen possibly a little less. Secularly, what we are doing is consistent across the country. We are working towards improving our quality of acquisition, and hence, you may have seen some percentage change in contribution. Hopefully in next quarter and the quarter after, everybody should be growing at old rates.

Speaker #5: But secularly, what we are doing is consistent across the country. We are working towards improving our quality of acquisition, and hence, you may have seen some percentage change in contribution.

Speaker #5: But hopefully, in next quarter and the quarter after, everybody should be growing at old rates.

Speaker #4: Thanks, Larson. Thank you.

Aditya Bansal: Thanks, Soumen. Thank you.

Speaker #5: Thank you.

Speaker #1: The next question comes from Sanjesh Jain. Mr. Jain, you may please unmute your side, introduce yourself, and ask your question now.

Moderator: The next question comes from Sanjay Jain. Mr. Jain, you may please unmute your side, introduce yourself and ask your question now.

Operator: The next question comes from Sanjay Jain. Mr. Jain, you may please unmute your side, introduce yourself and ask your question now.

Speaker #3: Yeah. Thanks, Shamin, for taking my question. First one—the depreciation, there is a sharp jump sequentially: 4.9% quarter-on-quarter. Any particular reason for that sharp increase in the depreciation?

[Analyst] (ICICI Securities): Thanks, Soumen, for taking my question. First, on the depreciation, there is a sharp jump sequentially, 4.9% quarter-on-quarter. Any particular reason for that sharp increase in the depreciation? That is number one. Number two, on the EBIT margin for the home segment, that tends to be negative or immaterial. When should we see revenue translating into a profit growth in the home segment for Hexacom?

Sanjesh Jain: Thanks, Soumen, for taking my question. First, on the depreciation, there is a sharp jump sequentially, 4.9% quarter-on-quarter. Any particular reason for that sharp increase in the depreciation? That is number one. Number two, on the EBIT margin for the home segment, that tends to be negative or immaterial. When should we see revenue translating into a profit growth in the home segment for Hexacom?

Speaker #3: That's number one. Number two, on the EBIT margin for the Home segment, that tends to be negative or immaterial, when should we see revenue translating into profit growth in the Home segment for Exacom?

Soumen Ray: Well, thanks, Sanjesh. The depreciation that you see a little higher is, first of all, there is one day extra, so you see a little more. Also, the IPTV rollout has led to some increase in depreciation of Hexacom. Coming to EBIT margin, see, whenever we start a CPE-based business, until we reach a critical mass, there are certain costs which do not get leveraged. I cannot give you a number as to when, or a forecast as to when it will become positive, but you can rest assured that the unit economics is no different. It is just that once you get into a reasonable size and scale, this will naturally turn positive. It is a small number, so it does not disturb the overall trajectory of Hexacom, which is a good thing. We are able to build the category without impacting the overall profitability of the entity.

Speaker #5: Well, thanks, Sanjesh. The depreciation that you see is a little higher; first of all, there is one extra day, so you see a little more.

Speaker #5: Also, the IPTV rollout has led to some increase in depreciation of Exacom. Coming to EBIT margin—see, whenever we start CP-based business, until we reach a critical mass, there are certain costs which do not get leverage.

Speaker #5: I cannot give you a number as to when, or a forecast as to when, it will become positive. But you can rest assured that the unit economics is no different.

Speaker #5: It is just that once we get into a reasonable size and scale, this will naturally turn positive. It is a small number, so it does not disturb the overall trajectory of Exacom, which is a good thing.

Speaker #5: We are able to build the category without impacting the overall profitability of the entity. The underlying unit economics are the same as any other player.

Soumen Ray: Underlying unit economics is the same as any other player.

Speaker #3: Got it. And just one add-on to that: we pay fiber rental, and then, from a profitability perspective, in-home service for Exacom will always be with Bharti Airtel. Bharti Airtel counts it as an asset, and we count it as an operating cost.

[Analyst] (ICICI Securities): Got it. Just one add-on to that. We pay fiber rental and hence the profitability in home service for Hexacom will always be slightly inferior to Bharti Airtel, which count it as asset and we count it as an operating cost. Is that the right understanding?

Sanjesh Jain: Got it. Just one add-on to that. We pay fiber rental and hence the profitability in home service for Hexacom will always be slightly inferior to Bharti Airtel, which count it as asset and we count it as an operating cost. Is that the right understanding?

Speaker #3: Is that your right understanding?

Speaker #5: Well, it is a reasonably right understanding. But at the EBIT level, you have depreciation of the fiber also coming in. So, I think if you look at EBIT, it is not very different from one or the other.

Soumen Ray: Well, it is a reasonably right understanding. At the EBIT level, you have depreciation of the fiber also coming in. I think if you look at EBIT, it is not very different from one of the others.

Speaker #3: That's clear. Thanks, Shamin. Thanks for answering all those questions at the surface for the coming quarter.

[Analyst] (ICICI Securities): That's clear. Thanks, Soumen. Thanks for answering all those questions and best of luck for the coming quarter.

Sanjesh Jain: That's clear. Thanks, Soumen. Thanks for answering all those questions and best of luck for the coming quarter.

Speaker #5: Thank you, Sanjesh.

Soumen Ray: Thank you, Sanjesh.

Speaker #1: Thank you, everyone. Now, I would like Shamin to give his closing remarks for Bharti Exacom.

Moderator: Thank you, everyone. I would like Soumen to give his closing remarks for Bharti Hexacom.

Operator: Thank you, everyone. I would like Soumen to give his closing remarks for Bharti Hexacom.

Speaker #5: Thanks a lot to all of you for joining the call for Q1. We had a good quarter. Look forward to meeting you again for the Q2 results.

Soumen Ray: Thanks a lot for all of you for joining the call for Q1. We had a good quarter. Look forward to meeting you again for the Q2 results. Thank you.

Speaker #5: Thank you.

Speaker #1: Thank you, everyone, for joining us today. Recording of this webinar will be available on our company website. Thank you, and have a great day ahead.

Moderator: Thank you everyone for joining us today. A recording of this webinar will be available on our company website. Thank you and have a great day ahead. Bye.

Operator: Thank you everyone for joining us today. A recording of this webinar will be available on our company website. Thank you and have a great day ahead. Bye.

Speaker #1: Bye.

Operator 2: Goodbye

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Q1 2027 Bharti Airtel Ltd Earnings Call

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