Bharti Airtel to cut capex; wants further tariff adjustments: Gopal Vittal

bharti airtel

Bharti Airtel is focusing its capital expenditure (capex) on rolling out more 5G radios to meet the increasing data demand from 5G subscribers for mobility and fixed wireless access (FWA) services in its home business.

Vice-Chairman and MD Gopal Vittal said the telco's annual capex spending will see a sharp moderation in FY25 and FY26 versus the record Rs 33,000 crore spending scaled in FY24.  He added that Airtel won't be spending extra cash on 4G capacity expansion from now on and will direct the capex for 5G expansion.

The company’s Vice Chairman and Managing Director, Gopal Vittal, noted that India’s average revenue per user (ARPU) remains the lowest globally, and further tariff repairs are needed for the industry to achieve financial stability and sustainable returns.

“We are not making any new investments in 4G capacity. Instead, we are deploying additional 5G radios as we expand and see more devices entering the market. These are the areas where capex continues to be allocated,” Vittal told analysts during the Q3 earnings call on February 7.

“At a headline level, capex should moderate in FY26. With revenue growth, the capex-to-revenue ratio will continue to decline, eventually reaching levels comparable to global peers.”

Airtel recently awarded a “multi-billion dollar, multi-year extension” of its 4G and 5G equipment contracts to European vendors Nokia and Ericsson to expand its network in key cities and rural areas experiencing data growth.

Airtel’s 5G user base has reached 120 million, Vittal said, adding that the company continues to benefit from rising 5G smartphone shipments. “5G shipments continue to grow, accounting for over 80% of total smartphone shipments. We are capturing our fair share of this expanding market.”

Another key priority, he said, is strengthening Airtel’s backbone network, also known as its transport network, to support wireline broadband, business-to-business (B2B), and mobile operations.

Airtel's strong uptake of its 2GB plan, which offers unlimited 5G data, is driving data monetization, Vittal said, adding the telecom company is fully focused on accelerating the transition from 2G to 4G/5G and targeting up to 80 million high-end prepaid users to switch to postpaid, aiming to fuel the next phase of ARPU (average revenue per user) growth.

Vittal is also hopeful that a shift in India’s telecom pricing structure will gradually increase prepaid rates. He believes this could pave the way for a rise in postpaid pricing, which is currently double the prepaid rates, further boosting telco ARPUs.

Vittal emphasised Airtel’s commitment to diversifying beyond wireless services.

“Broadband penetration in India remains low but is expanding rapidly, driven by increasing home connectivity adoption and shifting content consumption patterns. We believe the market could double from over 45 million to between 80 million and 90 million homes in the medium term,” Vittal said. “While we have improved our performance, there is still significant room to enhance our competitiveness.”

Over the past two quarters, Airtel’s FWA availability has expanded significantly across key PIN codes, now covering over 2,000 cities. “Our accelerated fiber home pass expansion continues, with a quarterly addition of 1.9 million, bringing the total home pass count to 35 million.”

Vittal also revealed that Airtel has successfully tested the 5G Standalone Architecture (SA) solution with thousands of customers for FWA. However, the company does not see an immediate need to deploy it, given that there is no uplink differentiation compared to the Non-Standalone (NSA) solution.

“We have proven the technology. Given the current network capacity, we are not seeing any uplink differentiation. Secondly, we are fully prepared to launch FWA whenever necessary—even as soon as tomorrow morning if needed. Our approach is not about deploying technology for the sake of it but about delivering meaningful outcomes in terms of experience and cost,” he said.

“Our core network is already fully converged and ready for SA. All necessary enablers are in place—it’s just a matter of software implementation, which comes with a small fee.”