Bharti Airtel is the second-largest telecom operator in India. The telco has been working on improving its business performance in a very strategic way. Airtel is the only telecom operator that has been profitable since the arrival of Reliance Jio, which is a statement on its own. There are multiple factors for why the stock of the telco can pick an upward trend in the coming months.
Airtel Will Benefit from Tariff Hikes
While one round of tariff hikes has already been implemented in late 2021, there’s another one expected to come by the end of 2022. This will help Airtel in improving its average revenue per user (ARPU). By keeping up with the trend of adding new subscribers and increasing ARPU, the telco’s overall revenues should see positive growth.
Airtel’s Overall 4G Subscribers are Increasing
Unlike Jio, Airtel has a mix of 4G and legacy network users (2G). But the telco’s overall 4G users are growing. The growth in 4G users would again mean higher ARPU which will lead to revenue growth. Airtel has added new 4G users at the cost of Vodafone Idea (Vi), as the latter hasn’t been able to make aggressive capex on improving the 4G experience for the users across the nation.
Airtel has Enterprise Business
Bharti Airtel’s enterprise business is going to benefit the telco a lot once 5G comes. Already, a major chunk of Airtel’s revenues come from its B2B arm called Airtel Business. With 5G, the demand for enterprise services is expected to grow multiple folds and Airtel being the leading telco in the B2B segment would certainly benefit from it.
Airtel Payments Bank
Airtel owned Airtel Payments Bank has already become a profitable fintech company, something that we don’t see in India much. With more people adopting digital routes for money transactions, the overall volume of transactions is expected to grow in the coming years which will boost the growth of Airtel Payments Bank.
Other Factors
Bharti Airtel has pre-paid a lot of high-interest dues which will help the telco in saving money in the long run. Further, the telco had recently announced a partnership with Google to make smartphones more affordable and accessible for users in India. Other factors including the 5G ready network, reforms from the government to help the telecom sector and more make Airtel’s stock a value buy for long-term investors.
