Remember when making a phone call was a luxury? Well, it seems like Bharti Airtel is trying to bring back some of that exclusivity. The telecom giant has just announced a tariff hike of 10-20% across its plans. But before you start panicking about your phone bill, let’s dive into what’s really going on here.
The Hike Breakdown
First, let’s look at the numbers:
- Prepaid plans: Hiked by 11-20%
- Postpaid plans: Increased by 10-20%
- Entry-level plans: A modest 11-12% increase
Now, you might be wondering, “Why such a wide range?” Well, Airtel’s playing a delicate game here. They’re trying to squeeze more revenue out of their customers without pushing them away. It’s like trying to boil a frog slowly – if you turn up the heat too fast, it’ll jump out of the pot!
The ARPU Dream
Here’s where it gets interesting. Bharti has been harping on about the need to increase ARPU (Average Revenue Per User) to ₹300 industry-wide. It’s like their holy grail.
Currently, Airtel’s ARPU stands at ₹209 per month. With this hike, analysts expect it to jump to:
- ₹236 per month in FY25 (a 13% increase)
- ₹269 per month in FY26 (another 14% bump)
That’s still short of their ₹300 target.
The Subscriber Story
Now, you might think that hiking prices would scare away customers. But Airtel’s betting on the opposite. They’re expecting to add:
- 16 million new subscribers in FY25, reaching 362 million
- 20 million more in FY26, hitting 381 million
That’s a lot of new people saying “Hello, can you hear me now?”
The Money Talk
All these hikes and new subscribers are expected to fatten up Airtel’s wallet. Here’s what the crystal ball (aka analyst projections) shows:
- FY25 Revenue: ₹1,742 billion (up 16.2% year-on-year)
- FY26 Revenue: ₹2,042 billion (another 17.2% jump)
And profits? They’re expected to soar:
- FY25 PAT (Profit After Tax): ₹166 billion (a whopping 94.2% increase)
- FY26 PAT: ₹186 billion (an 11.8% growth)
The Spectrum Splash
But it’s not all about hiking prices. Airtel’s also been shopping for spectrum. They just bought 97MHz of spectrum for ₹68.6 billion. It’s like they’re buying more lanes for their data highway to make sure your cat videos load faster.
The Africa Anxiety
It’s not all smooth sailing, though. Airtel’s Africa business is facing some headwinds due to currency devaluation. It’s like trying to run a race with your shoelaces tied together.
The Million-Dollar Question
So, should you be rushing to buy Airtel stock? Well, the analysts seem to think it’s not a bad idea. They’re maintaining an “Accumulate” rating with a target price of ₹1,620. That’s about a 12% upside from the current price of ₹1,444.
But here’s the kicker – Airtel’s currently trading at 52 times its estimated FY25 earnings and 44 times its FY26 earnings.
The Bottom Line
Airtel’s playing a high-stakes game here. They’re betting that they can hike prices, add customers, and improve profitability all at the same time. It’s like trying to juggle while riding a unicycle – impressive if they pull it off, but there’s always the risk of a spectacular fall.
For now, it seems like Airtel’s call for higher ARPUs is ringing loud and clear. But in the ever-changing world of telecom, who knows what the next disruption might be? Maybe we’ll all be communicating via brain waves in a few years, making this whole debate moot!
So, keep an eye on your phone bill, but also on Airtel’s performance. After all, in the world of telecom, the only constant is change – and maybe those annoying spam calls!
