Bharti Airtel has achieved a remarkable turnaround in recent years, overcoming significant challenges following the disruptive entry of Reliance Jio into the Indian telecom market in 2016. Jio’s introduction of free services, ultra-low tariffs, and a 4G-only model forced competitors to slash prices, upgrade networks, and manage the costs of maintaining 2G, 3G, and 4G services. This disruption led to industry-wide revenue declines and consolidation, leaving only three private telecom players in the market.
Between FY16 and FY19, Airtel’s wireless revenue declined by 25%, and EBITDA fell by 57%, resulting in losses from FY19 to FY21. However, a strategic overhaul enabled Airtel to regain its footing, as outlined in the Motilal Oswal Annual Wealth Creation Study 2024. Key to this turnaround was a series of tariff hikes post-consolidation, which allowed Airtel to focus on premium customers, enhance average revenue per user (ARPU), and strengthen its position in the market.
Airtel’s “Project Leap,” a ₹600 billion investment in network capacity and coverage, played a pivotal role in its recovery. Strategic acquisitions of spectrum and subscribers from exiting players like Telenor and Tata Teleservices further bolstered its market share. Additionally, Airtel implemented a robust cost-optimization program, streamlining operations, reducing sales and marketing expenses, and leveraging network-sharing opportunities. To fund these initiatives and ensure financial stability, the company raised $20 billion through equity, debt, and asset monetization.
To attract and retain premium customers, Airtel introduced tiered tariffs and bundled services like Airtel Black, which integrates home broadband, mobile, and DTH services under one plan. This strategy significantly improved customer retention.
By FY24, these measures delivered substantial results. Consolidated revenue grew at a CAGR of 13% between FY19 and FY24, while EBITDA rose at an impressive 25% CAGR. Increased free cash flow enabled Airtel to reduce debt and strengthen its financial position. Reflecting its operational success, Airtel’s market capitalization grew 4.3 times between FY21 and FY24.
