‘ARPU must go up to Rs 300’: Rajan Bharti Mittal, says Moody’s rating upgrade a reflection of improved financials

Rajan Bharti Mittal, Vice-Chairman of Bharti Enterprises, shared insights into key aspects affecting the telecommunications and broader business environment, including ARPU (Average Revenue Per User), Moody’s ratings, and the role of NCR (National Capital Region) in the group’s real estate ambitions. 

In a recent conversation Siddharth Zarabi, Editor of Business Today, Mittal also shed light on rising protectionism, shifting from multilateral agreements to more bilateral negotiations, and its effects on cross-border business growth. Despite global challenges, Mittal emphasizes India as a “bright spot”, noting its fast economic growth, especially in manufacturing and renewable energy. 

ARPU outlook 

Mittal highlighted the importance of ARPU in stabilising the telecom sector, stating that despite the challenges, the industry has moved towards a more stable phase with three major private operators. He expressed confidence that ARPU, which remains one of the lowest globally, is expected to grow, forecasting a rise to Rs 300 per user over time. This will still be the lowest, he added. This increase is critical for sustaining telecom operators as the backbone of India’s digitised economy, even though ARPU growth may be gradual due to existing churn in the market, Mittal added. 

Moody’s upgrade 

Mittal also discussed Bharti Enterprises’ positive recognition by Moody’s, which recently revised its outlook to “positive.” This decision was influenced by improved financial metrics and better management of challenges such as regulatory hurdles and intense competition in the telecom space, he said. Mittal acknowledged that the company has faced a long phase of financial strain but emphasised that the sector is now stabilising. The strong performance, including the decision to prepay spectrum dues, demonstrates the group’s solid financial footing and sends a positive signal to investors and stakeholders, he said. 

Moody’s Ratings on January 22 upgraded its outlook on Bharti Airtel to ‘positive’ from ‘stable’, on the back of the second largest Indian telco’s improved financial profile and steadily increasing subscriber market share as it gains users from Vodafone Idea. The ratings agency also affirmed the Baa3 senior unsecured debt rating on the bonds issued by Bharti. It added that it could upgrade Airtel’s rating to Baa2 if there was a sustained improvement in the company’s profitability, and there were no adverse changes in the regulatory environment in its key operating countries. 

Real estate development 

When asked about Bharti’s real estate ventures, particularly in the NCR (National Capital Region), Mittal confirmed that Bharti Realty is a growing component of Bharti Enterprises’ broader strategy. The group continues to invest in landmark projects within the NCR region, focusing on large-scale developments, particularly in areas surrounding Delhi’s airport. While Bharti Enterprises is primarily known for telecom and other services, Rajan assured that the real estate arm will remain a key player in the company’s long-term growth plan, with a focus on NCR for now. 

He also hailed the government’s push through production-linked incentives (PLIs), which is improving India’s manufacturing sector with focus on sectors like mobile phone assembly. Mittal expressed confidence that India will remain at the forefront of technological advancements in his concluding note.