Overview
The telecom industry plays a vital 9: role in Indias march towards becoming a digital powerhouse by fuelling the growth of many new-age industries, revolutionising commerce and empowering citizens. Over the years, the telecom F
sector has been instrumental in the digital transformation of critical :
sectors such as e-commerce, l
financial services, healthcare, I
education, gaming and OTT, among I
others, and is expected continue K
the transformation in the years I i
to come. This is evident from continued investments made by operators towards technological advancement in creating future-ready networks. :H
FY 2023-24 proved to be a landmark year for the telecom industry, with operators deploying 5G networks across the country in record time, and making it one of the largest 5G installed bases globally. 5G offers significantly faster speeds, low latency, and opens the doors for innovation across various industries and sectors. The ongoing 5G investments will catalyse this transformation in India.
During the year, Government of India passed the Telecommunications Bill, 2023, a forward-looking and progressive legislation, in continuation to its seminal reforms of September 2021. The Bill simplifies a complex system, consolidating various types of licensing into a more cohesive and efficient authorisation-based regime.
It ensures predictability and availability of spectrum.
‘Right of Way reforms aim to streamline approvals across the country.
Over the last 18 months, 5G smartphone shipments have kept pace with 5G network roll out in the country, with its share in overall smartphone shipments rising to 71% from 43% at the start of the year. However, entry-level 5G smartphone prices continue to remain high for mass market adoption as few handset manufacturers have launched affordable options, while the same continues to be expensive as compared to entry-level 4G handsets. Also, notwithstanding the pace of 5G deployment, B2C use cases apart from Fixed Wireless Access (FWA) remain few and far to monetise the investments. Considering the ongoing investments, the Indian telecom industry continues to grapple with the challenges of a high tax structure, low tariffs, and sub-par return ratios. To achieve long-term financial sustainability and healthy competitive environment, the industry needs tariff repair along with favourable policy framework.
Against this backdrop, Airtels razor-sharp focus on execution resulted in life-time high market share across all business segments. It continued to deliver consistent performance with its simple and clear strategy of winning quality customers, premiumising the portfolio with acceleration in post-paid and focussing on converged offerings, and delivering brilliant experience to customers. The Company expanded its rural coverage by deployment of 33,000+ network sites across these areas.
The mobile segment achieved healthy operating performance, driven by continued RMS gains, underlying operating leverage and relentless focus on improving cost efficiencies. Airtel Business recorded strong revenue growth in the domestic business, while global business saw some moderation due to macro-economic headwinds. In the domestic market, the Company continues to gain market share - led by GTM re-tooling, improved account management and customised solution offerings. The Homes Business sustained its growth momentum, garnering 1.6 million net customer additions on the back of the accelerated home pass expansion, which is likely to yield benefits going ahead. Amid macro challenges,
DTH business saw positive net customer additions after two years. A focused market strategy led to sustained improvement in customer market share.
The Company continues to leverage its digital capabilities and strengthen its portfolio of digital services. Airtels diverse portfolio encompasses Airtel IQ, loT, Airtel Payments Bank, Cloud, SD-WAN, and Airtel Finance. Airtel IQ is the worlds first network-embedded CPaaS. Airtels loT business, one of our fastest-growing digital offerings, is set to play a pivotal role in the governments smart metering programme that will see the deployment of 250 million smart meters across the country.
Airtel Payments Bank continued to demonstrate a robust performance. The number of monthly transacting users grew by 22% to reach ~67 million. Deposit growth remained strong at 50% over the previous year. Airtel Finance achieved notable milestones, with the personal loans book size crossing Rs.26 billion and 360k+ co-branded credit cards issued as on March 2024. Airtel Finance, through its four partners across banks and NBFCs, is disbursing loans at a run rate of Rs.5.8 billion per quarter, as on March 31, 2024.
The Companys ESG initiatives and War on Waste (WoW) efforts have been playing a critical role in driving sustainable growth. Our investments, strategy and efforts are aligned with the ESG agenda. During the year, the Company made significant strides in fostering workplace diversity. Women represent 15.8% of Airtels workforce, marking over 40% Y-o-Y increase. On environment, efforts are underway for greening by solarising networksites and increasing the use of alternative energy sources in data centres. The Company continues to enhance employee security and well-being through focused initiatives. Airtel continues to maintain high standards of disclosure, transparency and code of ethics.
Airtels WoW programme is ingrained in its operational ethos. Over the past three years, the Company has achieved substantial operational expenditure savings through various initiatives. FY 2023-24 yielded strong results, with significant reduction in cost per site despite 5G cost absorption. The Company continues to extensively leverage data science, digital tools and greening of the network. ESG and WoW agenda underscores Airtels commitment to sustainability, diversity and operational efficiency.
Economic Review
In 2023, the global economy averted recession and major slowdown amid high interest rates, leveraged balance sheets and geopolitical challenges. Inflation eased from its peak in 2022, but continued to remain above the historical average. The global economy recorded GDP growth of 3.2%, surpassing initial estimates of 2.8% at the start of the year. This economic resilience can be attributed to government spending and robust household consumption led by the utilisation of pandemic-induced household savings in major advanced economies.
Most major economies, including the US, Europe, other emerging markets and developing economies outpaced growth estimates. Advanced economies grew by 1.6%, whereas emerging markets (EMs) outpaced global growth at 4.3%. India remained the fastest-growing major economy.
Within EMs, China was impacted by the slowdown of its real estate sector and subdued domestic demand. While Indias outperformance can be attributed to a robust policy framework and implementation of structural reforms over the past few years. Some developing nations, mainly in South Asia, were impacted by economic challenges on account of high import bills and currency devaluation.
With ebbing inflation, risks of global financial instability have eased, and this is reflected in the buoyancy of the global capital markets. Many EMs have witnessed renewed capital inflows, and certain frontier markets are observing similar trends.
Source: IMF World Economic Outlook Aoril 2024
Outlook
A mix of optimism and caution marks the global economic landscape, which has been shaped by a series of developments over the past months. Although there are signs of improvement, the outlook remains clouded by the uncertainties around geopolitical developments, rising debt and lack of clarity on the interest rate revision cycle.
The IMF projects a sustained global economic growth of 3.2% in 2024 and 2025. However, the growth would remain belowthe historical average of 3.8% during 2000-2019. The sustenance is attributed to expected resilience of major economies like the US and several large EMs. A faster-than- expected decline in inflation could prompt central banks to ease interest rates and loosen fiscal policies. IMF estimates global headline inflation to fall from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies returning to their inflation targets sooner than EMs.
The policymakers across the globe will face challenges in striking the right balance between supporting economic growth and managing inflation. Structural reforms aimed at enhancing productivity and resilience will remain critical for long-term sustainability. As pointed out by the IMF, proactive policies and prudent decision-making will be critical to navigating uncertainties and fostering stable growth in the coming years.
Indian Economy
The Indian economy exhibited strong growth and continued outperformance over other large emerging economies.The strong growth momentum was supported by policy framework and structural reforms. Factors such as governments capital expenditure on infrastructure, manufacturing push, and acceleration of a digital economy are some of the drivers supporting this growth momentum. The central banks focus on managing inflation and proactive policy interventions ensured financial stability and provided much needed impetus to economic growth. As per second advances estimates (SAE), India recorded GDP growth of 7.6% in FY 2023-24, a notable improvement over the preceding growth rate of 7% during FY 2022-23 and marking the third consecutive year of above 7% growth.
Challenges on the supply side persisted due to global factors and posed constraints to the economys growth trajectory. Disruptions in global trade and increased transportation costs, exacerbated by incidents such as the Red Sea conflict, presented hurdles to supply chain operations.
Investment cycle uptrend supported by sustained capex spends by the government, improving capacity utilisation and production linked incentives (PLI) announced across various sectors are expected to enable corporate sector investment revival.
The favorable economic conditions in India, coupled with improved domestic macroeconomic fundamentals, led to a surge in capital inflows during the year. Among the emerging markets, India stood out by attracting the highest foreign portfolio investments (FPI), marking the second highest influx since FY 2014-15. Gross foreign direct investments (FDI) were largely flat, while net FDI experienced moderation due to increased repatriation.
In summary, Indias robust economic performance in FY 2023-24 can be attributed to a combination of factors, including healthy domestic demand, demographic advantages and a growth-focused policy framework.
Outlook
The Indian economy is expected to remain buoyant with continued support from structural policy reforms. The IMF projects strong forecasts for India, with an estimated GDP growth of around 6.8% in 2024, up by 30 basis points from its January 2024 projection. The softening of inflation and a potential rate easing during the year will support the growth momentum. The optimism is backed by various factors, including continuous growth in manufacturing sector, services sector, strong corporate and bank balance sheets, and increase in domestic demand.
Management Discussion & Analysis Africa Economy
The Sub-Saharan African economy saw tepid growth at 2.6% in 2023, vis-a-vis 3.6% in 2022, according to the World Bank. The slowdown was due to continued global economic uncertainty, increased fragility and conflict exacerbated by climate change, persistently high but softening inflation, and challenging global and domestic financial conditions due to high levels of debt.
The region is also plagued by uneven growth; East Africas growth is estimated to be 1.8% while West Africas -3.3% in 2023.
In summary, while there are lot of challenges faced by the region and growth is slow, the region has immense growth opportunities. Addressing inequality, managing debt, and fostering private sector development are crucial to ensuring the continents long-term prosperity.
Outlook
India remains on a strong structural uptrend to sustain its outperformance within large economies. While economies across the globe are impacted by inflation and rising debt, India is riding on its strengths and delivering sustained growth backed by robust consumer demand, growth in the manufacturing sector, capital investments and favourable government policies. Indias digital economy is growing at a rapid pace, and it is already one of the leading digital economies in the world. As connectivity is a fundamental pillar for digital economy, the telecom industry is playing a crucial role in its acceleration and adoption, supporting government initiatives, transforming businesses, enabling enterprises to diversify revenue streams, and transforming lives.
Indias digital finance architecture is leading the digital transformation. As per the RBI, India accounts for 46% of all digital payments worldwide, with 80% of these transactions attributed to UPI. With >900 million internet subscribers (wireline and wireless), India stands as one of the largest and fastest-growing markets for digital consumers. The Indian telecom industry is driving digital economy and serving as an economic multiplier.
As the economy grows, rising urban household income and rural development is enabling consumers to adopt and invest in newer technologies and upgrade their existing gadgets, including smartphones and digital TVs. According to IDC, in 2023, smartphone shipments saw muted growth, with 5G shipments contribution accelerating to 55% of total smartphone shipments. Meanwhile, the share of Smart TVs in total television shipments consistently hovered over 90%. This percentage is anticipated to climb even higher, driven by the expansion of broadband access,
Outlook
The World Bank forecasts economic growth to bounce back from 2.6% in 2023 to 3.4% in 2024. However, factors like mounting debt, uncertain global economic conditions, and probable climatic changes pose a risk. As per the World Bank, policymakers should focus on re-establishing macroeconomic stability, facilitating mobility, enhancing market accessibility, and ensuring that fiscal measures do not disproportionately burden the economically disadvantaged. demand for connected devices and the growing preference for OTT platforms, among other factors.
The telecom industry in India is poised to grow, led by enhanced penetration, sustained growth in data usage, upgrades from 2G to 4G/5G and evolving consumption habits. The Company is investing in networks across the country, with an acceleration in rural expansion and 5G rollout. FY 2023-24 was a historic year for the Company, with record network site deployment and fiber kilometre rollout. Airtel will continue to invest in capacity enhancement, coverage expansion and technological advancements.
For the industry to recover investments and generate respectable return ratios, mobile tariffs need to improve, which are one of the lowest globally.
In the face of rapid technological advancements, both B2C consumers and enterprises are increasingly seeking digital solutions to meet their diverse needs. The Company has been building a bouquet of digital services, Airtel IQ, SD-WAN, and CPaaS, loT and cloud, among others.
Over the years, the Company has transitioned from core connectivity offerings to tailored solutions, adapting to the evolving needs of enterprise customers. The Company is actively working with enterprises across industries to develop pertinent 5G use cases. Prudent capital allocation on spectrum purchases and adoption of the NSA network architecture for 5G have supported the Company in deleveraging its balance sheet.
Lastly, Sub-Saharan Africa, a region viewed through the lens of its challenges and slow growth, has immense potential. Despite the challenges, abundant opportunities await to be tapped. While the path to progress may be steep, the potential for transformative growth is undeniable.
Industry overview
Indian telecom sector
Indias total telecom users base stood at 1,199.28 million as on March 31, 2024. The telecom industry saw healthy customer additions in FY 2023-24 underscored by penetration improvement. In the current year, customer base grew by 230 basis points while the tele-density was at 85.69% as on March 31, 2024. The urban tele-density stood at 133.72%, whereas the rural tele-density stood at 59.19% as on March 31, 2024.
Among the service areas excluding metros, Kerala had the highest tele-density (121.65%) followed by Himachal Pradesh (119.43 %), Punjab (114.36%), Tamil Nadu (103.23%), Karnataka (103.20%), Maharashtra (102.89%), Andhra Pradesh (95.43%) and Gujarat (91.53%). Among the metros, Delhi topped with 280.62% tele-density. On the other hand, the service areas, such as Bihar (57.16%), Uttar Pradesh (67.03%), Madhya Pradesh (68.71%) and Assam (74.02 %) have comparatively low tele-density.
The wire-line customer base stood at 33.79 million at the end of March 31, 2024, vis-a-vis 28.41 million at the end of March 31, 2023.
Management Discussion & Analysis
Africa telecom overview
The mobile services sector in sub-Saharan Africa has grown rapidly in recent years, but connectivity and penetration are still relatively low, creating a clear opportunity. Mobile penetration is estimated to reach just 50% by 2030, compared to a global average of 73%, and while consumers are quickly adopting smartphones, there is still huge unmet demand for voice and data services.
Across sub-Saharan Africa, demand for data, mobile voice and mobile money services continue to grow, driven by a young and growing population seeking better connections with each other and with economic opportunity. An under-penetrated telecoms market, rising smartphone affordability, along with low data penetration, provide growth opportunities in both voice and data services. The telecoms market in sub-Saharan Africa is projected to grow by 4.4% CAGR over the next five years.
Development in regulations
India
Development in regulations
The year saw several regulatory changes and developments. The significant regulatory changes were:
A. TRAI recommendations on ‘Licensing Fee and
Policy Matters of DTH Services
• To reduce the license fee from current 8% to 3% immediately and then to zero by FY2026-27
• To reduce the bank guarantee exposure for DTH Industry by 80% in-line with the telecom reforms - An initial Bank guarantee for an amount of 5 crores for the first two quarters. Thereafter,
BG for an amount equivalent 5 crores or 20% of LF of two quarters and other dues not otherwise securitised, whichever is higher
• The gross revenue, applicable gross revenue and adjusted gross revenue for DTH licensees have been defined on the same lines as prescribed by Cabinet for telecom sector
B. TRAI recommendation on ‘Rationalisation of
Entry Fee and Bank guarantees (BG) dated
September 19,2023
• Entry fee should be reduced for the various licenses/ registrations/authorisation/permission (except for GMPCS & VSAT Authorisations under UL)
• For some authorisations like ISP-C, M2M & Audio-Tex, NIL entry fee is recommended
• The ceiling of Rs.15 crores on entry fee under UL should be removed
• Entry fee should be charged only at the time of entry and not renewal of license
• Financial bank guarantee and performance bank guarantee should be merged into a single BG
• For the initial year, the amount of this consolidated BG has to be as recommended (e.g. Rs.2 crores/circle for access services,
Rs.40 lakhs for ISP-A). Thereafter, it has to be higher of the initial year BG or 20% of the estimated sum payable (of LF & other unsecuritised dues)
• Electronic bank guarantees should be adopted by DoT for ease of doing business C. TRAI recommendations on ‘Licensing framework and Regulatory mechanism for submarine cable landing in India dated June 19, 2023
• International submarine cable should be allowed to carry domestic traffic on dedicated fiber pairs between two Indian cities, on the condition that such traffic is not transmitted/routed outside India
• Stub cables should be allowed to be laid up to any distance within the Exclusive Economic Zone (EEZ)
• Cable Landing Stations (CLS) operators should be classified as ‘essential services and ‘critical information infrastructure
• Two categories of CLS locations need to be recognised in the licensing framework
• Main CLS-Owners of the main CLS will seek clearance for submarine cable landings in India
• CLS Point of presence (PoPs) - Owners of CLS PoPs will have certain security and reporting obligations
• National long distance (NLD) licenses may establish domestic submarine cables connecting two or more cities on the Indian coastline
• National long distance / International long distance licenses should be amended to explicitly provide for terrestrial connectivity between different CLSs
D. Digital Personal Data Protection Act, 2023 ("DPDPA")
The bill was passed by Lok Sabha on August 7, 2023 and by Rajya Sabha on August 9, 2023, and received Presidential assent on August 11, 2023
The Act broadly provides for the following as notified in the official gazette on August 11, 2023:
• Obligations on entities collecting personal data i.e. data fiduciaries like Airtel
• Rights of individuals to obtain personal data, correct inaccurate data, erase data, and prevent disclosure of personal data
• An independent data protection board
• Creating trust between persons and entities processing personal data
• Remedies for unauthorised and harmful processing of personal data
E. Telecommunications Bill, 2023
The Bill broadly provides for the following as notified in the official gazette on December 24, 2023:
• Licensing
Shift from multiple nomenclatures of license, registration, permission etc. to ‘Authorisation for providing telecom services, for establishing, operating, maintaining or expanding telecom networks and for possessing radio equipment
• Spectrum
a. Auction recognised as the preferred mode of spectrum assignment, but administrative assignment allowed for specific purposes like national security and defence, law enforcement and crime prevention, public broadcasting services, radio backhaul for telecommunication services, certain satellite-based services such as: teleports, television channels, Direct To Home, Headend In The Sky, Digital Satellite News Gathering, Very Small Aperture Terminal, Global Mobile Personal Communication
by Satellites, National Long Distance, International Long Distance, Mobile Satellite Service in L and S bands etc.,
Bharat Sanchar Nigam Limited (BSNL) and MahanagarTelephone Nigam Limited (MTNL), etc.
b. Statutory framework for spectrum-related aspects like sharing, trading, leasing, surrender, harmonisation, etc.
• Breach of terms and conditions of
authorisation or spectrum assignment
a. Voluntary undertaking to enable disclosure of breaches
b. Tiered structure for dispute resolution - Adjudicating Officer, Designated Appeals Committee and TDSAT
• Right of Way (RoW)
a. RoW permission mechanism defined for both public and private properties
i. For public property- permission in time-bound manner
ii. For private property- negotiation and mutual agreement
b. Provision for establishing common ducts in infrastructure projects on open access basis
• Universal Service Obligation Fund (USOF)
a. The Universal Service Obligation Fund to be renamed as ‘Digital Bharat Nidhi
b. Its scope has been expanded to include underserved urban areas, in addition to rural and remote areas
c. It can also be applied to support R&D in telecom services, pilot projects, etc.
• User-related
a. Mandatory to use verifiable biometric-based identification for identification of users
b. Statutory duty on users to provide correct information
c. Framework for protection of users from certain specified messages (in consonance with TRAIs regulations)
• National Security
a. Provisions for lawful interception
b. Statutory framework for trusted source regime
Management Discussion & Analysis
• Civil Penalty and Offences
a. Contraventions like providing telecom services without authorisation, unlawful interception, obtaining SIMs through fraud
or cheating, etc. have been recognised as criminal offences, and will attract imprisonment and/or fine
b. However, some other contraventions, listed in the Third Schedule, like use of SIMs in excess of prescribed number, contravention of the provisions of section 28 (measures for protection of users), etc. would attract civil penalties
F. Draft Broadcasting Services (Regulation) Bill, 2023
• MIB released the Draft Broadcasting Services (Regulation) Bill, 2023 for public consultation on November 10, 2023
• Major overhaul of Broadcast Regulations. Clear recognition that MIB aims to regulate OTT providers like Cable/DTH
• Bill focuses on content not carriage. Lays down license/registration/intimation for broadcaster, DTH, Cable and OTTs
G. Spectrum Auctions 2024
• DoT, on March 08, 2024, issued the Notice Inviting Applications (NIA) for auction of all the available spectrum in 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz, 3300 MHz, and 26 GHz bands
• The cumulative reserve price of the 10523.15 MHz spectrum put to auction was Rs.96,317.65 crores
• Last date for bid submission was May 06, 2024 and live auction likely in June, 2024
H. TRAI Recommendations on "Usage of
Embedded SIM for Machine-to-Machine (M2M)
Communications" dated March 21,2024
• Provisions for integration of the SM-DP of Indian Telecom Service Provider (TSP) with the foreign SM-SR will be included in telecom licenses
• TSPs with UASL, UL/UL-VNO (Access), UL/UL- VNO (M2M) and registered M2MSPs can own and manage SM-SRs in the country
• The 901.XX IMSI (global IMSI series) allocated to Indian entities should not be permitted for providing M2M services in India
• Any M2M eSIM in an imported device on international roaming should be mandatorily reconfigured into profiles of Indian TSPs within 6 months of activation of roaming or on change of ownership of the device, whichever is earlier
• The Indian TSP/M2MSP will have to integrate its SM-SR with the SM-DP of Indian TSPs within 3 months of the request of the concerned OEM/ M2MSP
• The Indian TSP/ M2MSP will have to switch its SM-SR with the SM-SR of another Indian entity within 6 months of the request of the concerned OEM/M2MSP
I. TRAI Recommendations on "Introduction of
Calling Name Presentation (CNAP) Service in
Indian Telecommunication Network" dated
February 23, 2024
• CNAP service allows subscribers to see name of the caller along with the calling number
• TRAI has recommended that the service should be offered to subscribers on voluntary basis
• Name of the caller should be sourced from the name provided CAF for individual subscribers whereas entities with bulk/business connections can use a ‘preferred name - like a trademark or trade name
Africa - Legal and regulatory frameworks
Listing and shareholding developments Uganda
On November 7, 2023, Airtel Uganda listed 10.89% of its shares on the Uganda Securities Exchange (USE) in compliance with Uganda Communications (Fees and Fines) (Amendment) Regulations 2020, which created an obligation for all national telecom operator licensees to list 20% of their shares on the USE. The USE granted Airtel Uganda an extension until November 06, 2026, to offer the shortfall to achieve the 20% listing.
The Democratic Republic of the Congo
By a Ministerial Order dated October 10,2023, operators were given ten years to comply with the law that requires that all telecom licensees have a 30% local shareholding.
Kenya
On August 18, 2023, the Government of Kenya removed the requirement for 30% local shareholding for licensees operating in the telecoms sector, with immediate effect.
Malawi
Companies listed on the main board of the Malawi Stock Exchange (MSE) are required to have a minimum public float of 25%. Airtel Malawi pic has currently listed only 20% of its shares on the MSE. On April 06, 2023, the MSE granted Airtel Malawi pic a further period of three years within which to comply with the 25% public float requirement.
Spectrum developments
We acquire or renew spectrum to expand or maintain our ability to provide services. This year this included:
Nigeria
On May 09, 2023, Airtel Networks Nigeria Limited renewed its 2100MHz (2x10 MHz) spectrum licence at a price of $127m for a period of 15 years.
Uganda
On July 01, 2023, the Uganda Communications Commission (UCC) awarded Airtel Uganda Limited spectrum in the 800MHz (2 (2x5)) and the 3500MHz (1x1000) bands forthe remaining duration of its National Telecommunication Operators Licence, at no upfront cost.
Mobile termination regulation Rwanda
On October 14, 2023, the regulator in Rwanda set the asymmetrical mobile termination rate (MTR) for calls terminating on Airtel Rwanda Limiteds network at 2 Rwandan francs (RWF), and 1.5 RWF for those terminating on MTN Rwandas network. This related to all calls forthe period to July 2023 from January 01, 2023 (backdated). The same decision set the MTR rate for the period from August 2023 to August 2024, at 0 RWF for both mobile operators.
The Republic of the Congo
In October 2023, the regulator in the Republic of Congo set an asymmetric MTR in favour of Airtel Congo S.A. The rate was set at an asymmetric MTR of 7 Central African Francs (CFA) to terminate on Airtel Congo S.A.s network, and 5 CFA to terminate on MTNs network.
Know your customer Uganda
The Regulation of Interception of Communications Regulations, 2023 was enacted on May 12, 2023, making ita requirement to haveall customers submit biometric information to their mobile network operators by November 12, 2023. This requirement has been implemented by the Company.
Chad
In August 2023, the Government of Chad issued an Order, establishing new rules for identifying subscribers, requiring that operators collect full KYC details in respect of each customer within three months of the Order. The rules also limit the number ofSIM-cards to three per customer. Were complying with this requirement.
Nigeria
In December 2023, the Government of Nigeria issued directives requiring full barring of all MSISDNs (mobile station international subscriber directory numbers) without National Identification Numbers (NIN) as well as verification of all NINs used for SIM registration against the national database. Operators were required to comply with these directives in stages at various dates, with the final date for SIM barring set for July 31, 2024.
Management Discussion & Analysis
FINANCIAL REVIEW
CONSOLIDATED FIGURES
FY 2023-24 |
FY 2022-23 | |||
Particulars |
Rs. million | $ million* | Rs. million | $ million* |
Gross revenue |
1,499,824 | 18,127 | 1,391,448 | 17,313 |
EBITDA before exceptional items |
790,458 | 9,553 | 717,330 | 8,925 |
Interest, Depreciation & Others before exceptional items |
587,945 | 7,106 | 545,025 | 6,781 |
Profit before exceptional items and Tax |
202,513 | 2,448 | 172,305 | 2,144 |
Profit before tax |
126,790 | 1,532 | 165,607 | 2,061 |
Tax expense |
41,210 | 498 | 42,733 | 532 |
Profit for the year |
74,670 | 902 | 83,459 | 1,038 |
Earnings per share from continuing and discontinued operations (In INR / USD) |
13.09 | 0.16 | 14.80 | 0.18 |
*1 USD = Rs.82.74 exchange rate for the financial year ended March 31, 2024 (1 USD = Rs.80.37 for the financial year ended March 31,2023)
STANDALONE FIGURES
FY 2023-24 |
FY 2022-23 |
|||
Particulars |
Rs. million | $ million* | Rs. million | $ million* |
Gross revenue |
941,198 | 11,375 | 847,201 | 10,541 |
EBITDA before exceptional items |
510,867 | 6,174 | 441,477 | 5,493 |
Interest, Depreciation & Others before exceptional items |
426,943 | 5,160 | 386,020 | 4,803 |
Profit before exceptional items and Tax |
83,924 | 1,014 | 55,457 | 690 |
Profit before tax |
71,161 | 860 | 12,693 | 158 |
Tax expense |
21,279 | 257 | 13,589 | 169 |
Profit for the year |
49,882 | 603 | (896) | (11) |
Earnings per share (In INR / USD) |
8.74 | 0.11 | (0.16) | (0) |
*1 USD = Rs.82.74 exchange rate for the financial year ended March 31, 2024 (1 USD = Rs.80.37 for the financial year ended March 31, 2023)
The consolidated revenues for the year ended March 31, 2024, at Rs.1,499,824 million, vis-a-vis Rs.1,391,448 million in the previous year, an increase of 108,376 million.
The Company incurred operating expenditure (excluding access charges, cost of goods sold, license fees, Charity & Donation costs) of Rs.479,249 million representing an increase of 6.3% over the previous year. Consolidated EBITDA at Rs.790,458 million increased by 10.2% over the previous year on reported basis. The Companys EBITDA margin for the year increased to 52.7% as compared to 51.6% in the previous year led by operating leverage and focus on improving cost efficiencies.
Depreciation and amortisation costs for the year were higher by 8.5% to Rs.395,376 million, due to continued network expansion and 5G roll out. Consequently, EBIT for the year stood at Rs.392,757 million, marking an increase of Rs.40,528 million over the previous year. The Companys EBIT Margin for the year increased to 26.2% vis-a-vis 25.3% in the previous year.
Net finance costs at Rs.217,339 million were higher by Rs.29,895 million compared to the previous year.
Consequently, the consolidated profit before taxes and exceptional items at Rs.202,513 million compared to profit of Rs.172,305 million for the previous year.
After accounting for exceptional items and non-controlling interests, the resultant consolidated net profit for the year ended March 31,2024, came in at Rs.74,670 million as compared to net profit of Rs.83,459 million in the previous year.
The capital expenditure for the financial year ended March 31, 2024, was Rs.394,821 million.
KEY RATIOS
Key Ratios |
Units | FY 2023-24 | FY 2022-23 | Y-o-Y% |
Capex Productivity |
% | 55.25 | 53.77 | 1 |
Opex Productivity |
% | 32.26 | 32.39 | 0 |
Interest Coverage Ratio |
Times | 4.96 | 5.01 | (0.05) |
Net Debt to Shareholders Equity |
Times | 2.50 | 2.75 | (0.25) |
EBITDA Margin |
% | 52.70 | 51.55 | 1 |
Net Profit Margin |
% | 5.0 | 6.0 | -1 |
Return on Shareholders Equity |
% | 9.36 | 11.58 | -2 |
Liquidity and Funding
As on March 31, 2024, the Company had cash and cash equivalents ofRs.69,155 million and short-term investments of Rs.2,695 million. As on March 31, 2024, the Company generated an operating free cash flow of Rs.395,636 million. The consolidated net debt excluding lease obligations for the Company stands at Rs.1,409,704 million compared to Rs.1,526,508 million in the previous year. Consolidated net debt for the Company including the impact of leases stood atRs.2,046,461 million as on March 31, 2024.The Net Debt-EBITDA ratio, including the impact of leases as on March 31, 2024, was 2.6x as compared to 2.9x as on March 31, 2023. The Net Debt-Equity ratio was at 2.5x as on March 31, 2024, as compared to 2.7x as on March 31, 2023.
The Company paid Rs.8,024 crores in July 2023 and Rs.8,325 crores in January 2024, making a total repayment of Rs.16,349 crores to the Department ofTelecom (Government of India) towards part pre-payment of deferred liabilities pertaining to the spectrum acquired through the 2015 auction. These liabilities carried an interest rate of 10% and were paid off through strong free cash generated by business.
Airtel at a glance
Bharti Airtel is a global telecom solutions provider, serving over 550 million customers in 17 countries across South Asia and Africa. In the 2023-24 financial year, the Company continued on its consistent growth trajectory, and recorded a life-high revenue market share across the businesses.
In mobile services, the Company crossed the milestone of a total of 350 million customers and 250 million data customers.
The Companys bet on expanding its footprint in rural areas has paid off; it gained market share across all circles and added 28.6 million new smartphone customers during the year. Airtel Increased its ARPU to an industry-high of Rs.209.
On Broadband, Airtel continued the momentum and added 1.6 million customers. The Company saw some green shoots emerging in the DTH business. After two years of decline, Airtel grew its customer base by 2+ lakh, the only operator in the industry to grow customer base during the year.
Airtel Business posted double-digit growth despite headwinds in the global business segment. The domestic India business continued to deliver solid growth.
In Airtel Africa, the overall mobile customer base grew by 9% to 152.7 million and mobile money customer base grew by 20.7% to 38.0 Mn as of March 31, 2024.
Segment-wise performance
B2C services
Mobile Services: India Overview
Airtel has been consistently delivering on its stated strategy to attract and retain high-value customers and premiumise portfolio. With the aim to offer differentiated network experience to customers, Airtel has accumulated largest mid-band spectrum pool over the course of its journey. Airtel has been able to offer best-in-class 5G experience at the lowest cost of ownership with deployment of a non-standalone network architecture. Life-high revenue market share, industry leading ARPU growth and strong data customer addition, is a testament to our strategy and relentless focus on delivering superior experience to our customers. As on March 31, 2024, Airtels customer base stood at 352.3 million. The minutes on the network increased by 7.3% to 4,667 billion. The Company had 260.8 million data customers at the end of March 31, 2024, of which 252.7 million were 4G+5G customers. The increased penetration through bundled plans, with high inbuilt data, has also led to the total MBs on the network growing by 21.8% to 65,978 billion MBs.
The Companys focus to deliver superior network experience resulted in the consistent growth of 4G & 5G customer base. 5G shipments continue to grow steadily and the Company continue to gain fair share on 5G base which stood at-72 million as on March 31, 2024. During the year, revenues increased by 12% to Rs.850,488 million as compared to Rs.759,246 million in previous year driven by feature phone to smartphone upgrades, prepaid to postpaid upgrades, data monetisation and international roaming. Our premiumisation agenda to upgrade customers to higher value plans has been working well and contributing to ARPU growth. The segment witnessed an increase in the EBITDA margin to 55% during the year, compared to 52.8% in the previous year. EBIT margin for the year increased to 22.1%, compared to 19.6% the previous year. Strong margin delivery was attributable to operating leverage and sharp focus on building cost efficiencies.
Management Discussion & Analysis
The Company expanded its network at accelerated pace and rolled out 43,102 network sites during the year. The Company had 318,171 network towers as on March 31, 2024. The Company has also done a massive rollout of 33,000+ sites as on March 31, 2024 to expand its coverage in rural areas. Mobile broadband base stations stood at 931,854 at the end of the year, compared to 832,369 at the end of last year.
| FY 2023-24 | FY 2022-23 | Y-o-Y Growth |
|
Particulars |
Rs. million | Rs. million | 0/0 |
Gross Revenue |
850,488 | 759,246 | 12% |
EBIT |
188,199 | 148,450 | 27% |
Data Usage (Bn Mbs) —•- Voice usage (Bn Mins)
Key Highlights
A. 5G Rollout
• Continuing its 5G growth streak, Airtel touched the milestone of 50 million unique 5G customers on its network within one year of launching
the service. As of March24, Airtel 5G Plus is available across all states and union territories of India, making it one of the fastest rollouts in the country. Airtel customers across the country are on the digital superhighway and enjoying blazing network speeds.
• Airtel became the first operator to deliver uninterrupted connectivity to Metro commuters by deploying high-capacity nodes 35 metres below river Hooghly. Airtel invested in the infrastructure ahead of the actual commercial launch of the service, with the aim of offering seamless connectivity through the 4.8 km stretch in Kolkatas East-West Metro corridor connecting Howrah Maidan with Esplanade. High-capacity nodes have been deployed at each of these stations: Howrah Maidan, Howrah Station, Mahakaran, and Esplanade—for seamless
connectivity. Customers can now enjoy blazing 5G speeds, uninterrupted voice calls and data transmission that enhance the daily commuting experience, allow them to stay connected and productive through their travel.
• Airtel announced that its 5G service is now available to customers across Kochis water metro stations for the first time, adding to the already-live service in all other parts of the island city of Kochi. Airtel is the first service provider to democratise access to blazing fast 5G speeds to customers travelling on Indias first water metro service that connects 10 islands around Kochi through battery-operated electric hybrid boats for seamless connectivity with the city.
B. Digital innovations and customer delight
Airtel is consistently working on strengthening its
innovative core to anticipate and lead change in the
global digital landscape.
• To make staying connected easy, intuitive, and compelling, Airtel has refreshed its International Roaming Plan, which now costs as little as Rs.133/day at the starting point, making it more economical than the local SIMs of most countries. This has resulted in a significantjump in the Companys pack subscriptions in both the prepaid and postpaid. To cater to the surge in demand for international roaming packs and provide last minute assistance, Airtel has set up an international roaming kiosk in the duty-free area of the departure terminal of Delhis Indira Gandhi International Airport.
• Airtel has integrated in-flight roaming and introduced plans for both its prepaid and postpaid customers, allowing them to stay connected while onboard a flight. Customers can now enjoy high-speed internet browsing, talk to their loved ones, and enjoy a host of other activities while thousands of feet above the ground. Customers who subscribed to roaming packs priced atRs.2,997 for prepaid and Rs.3,999 for postpaid and above will automatically enjoy in-flight roaming benefit at no additional cost and also enjoy a host of in-flight offerings, including voice, data and SMS services.
• In partnership with Ericsson, Airtel successfully tested Indias first RedCap technology on its 5G network. Reduced Capability (RedCap) solution helps bring down complexity and extends the battery life of devices while delivering higher data speeds. Carried out in collaboration with Qualcomm Technologies, Inc. using its 5G RedCap test module, the testing on 5G TDD network represents the first implementation and validation of RedCap in India. Ericsson RedCap is a new radio access network (RAN) software solution that creates new 5G use cases and enables more 5G connections from devices such as smartwatches, other wearables, industrial sensors, and AR/VR devices. RedCap is the next in 5G technology to cater to use cases that are not yet best served by current new radio (NR) specifications. Compared to LTE device category 4, RedCap offers similar data rates with improved latency, device energy efficiency and spectrum efficiency. There is also the potential to support 5G NR features, such as enhanced positioning and network slicing.
• As part of the Companys commitment to adopting circular business practices, Airtel has partnered with IDEMIA Secure Transactions
to switch to recycled PVC SIM cards instead of virgin plastic. An industry first in India, Airtel is the only telecommunications service provider to implement this migration, which will prevent the generation of over 165 tonnes of virgin plastic and further circumvent the generation of over 690 tonnes of C02 equivalent in one year. This migration is in line with Airtels continued commitment to encouraging supplier partners and other stakeholders to reduce the generation of greenhouse gases and promote circularity.
• In partnership with Ericsson, Airtel successfully demonstrated mmWave 5G functionality on its network. Peak speeds of 4.7 Gbps were achieved during the testing, demonstrating the applicability of mmWave for high network capacity requirements. The 5G high-band or millimetre wave (mmWave) spectrum is a valuable resource when targeting densely populated urban areas with large number of mobile devices, homes, and business areas. The high-band, above 24 gigahertz, (GHz), will make
it possible for Airtel to offer unprecedented peak rates, low latency, and high capacity.
• Airtel Business won a Cloud and CDN mandate from the Digital India Corporation (DIC) to power DIKSHA (Digital Infrastructure for Knowledge Sharing), Indias largest platform for open education digital content. DIC is under the aegis of the Ministry of Education (MoE), Government of India. With this, Airtel has become the trusted partner for end-to-end management of DIKSHAs online platforms across its mobile application and website.
C. Awards & Recognition
• Airtels ‘175 re-played 5G campaign won Gold Lion in Brand Experience and Activation category at the Cannes Lions International Festival of
Creativity. This campaign also won Silver Lion in Sports Activation category and Bronze Lion in PR category, putting brand Airtel on the global stage of advertising.
• The Companys sustainability efforts were recognised at the prestigious Businessworld Sustainable World Conclave 2023 in the Most Sustainable Companies category and Telecom category. Airtel was awarded for making great strides in sustainability and leading India Inc towards creating a positive impact on the environment and society. Airtel was also awarded by The Economic Times for Sustainable Organisations 2023.
• Airtels sustainability initiatives were recognised with the prestigious Golden Peacock Awards for Sustainability 2023 in the Telecom category. This recognition reinforces its continuous efforts to balance its business goals with its unwavering commitment to societal and environmental well-being.
• Asiamoney Asias Outstanding Companies Poll 2023 ranked Airtel as the Most Outstanding Company in India, across sectors as well as within the telecommunications sector. The poll is decided by fund managers, analysts, bankers, and rating agencies and recognises publicly listed companies across 12 Asian markets for exceptional performance in the financial domain, investor relations and CSR initiatives amongst others. Airtel has been consistently bagging the top position every year since 2018, especially in the telecommunications industry.
• Airtel won the award of ‘Best Social Experience Team at the prestigious India Customer Excellence (CX) Summit & Awards 2023. The award underscores our relentless pursuit of excellence in providing a superlative social media experience to our consumers.
D. Financial efficiency
• Airtel prepaid Rs.8,024 crores in July 2023 and Rs.8,325 crores in January 2024, thereby making a total repayment of Rs.16,349 crores in FY 2023-24 to the Department of Telecom (Government of India) towards part prepayment of deferred liabilities pertaining to spectrum acquired in auction of 2015. The said installments had an interest
rate of 10%. Airtel continues to enjoy access to well-diversified sources of capital/financing, which provides the financial flexibility and ability to optimise costs, including opportunities for significant interest savings like these prepayment.
Management Discussion & Analysis
Homes Services Overview
The Homes Business, now present in 1,290 cities across India, continues to expand its footprint through accelerated LCO partnership rollout through FTTH and FWA. Growing preference for remote and hybrid work, changing content consumption habits and increasing adoption of digitisation in Tier II and Tier III towns are the key drivers for strong demand in home broadband. This has resulted in a sustained momentum of customer base addition, totaling to 7.62 million customers at the end of the year, representing a growth of 26%, compared to 6.05 million at the end of the previous year. In FY 2023-24, Airtel scaled its operations with the launch of Airtel Fiber in 91 new towns and increased its coverage by rolling out new Fiber network across major cities of its operations, helping the country advance towards its vision of Digital India.
Revenues from Homes services increased by 23% to Rs.49,701 million forthe year ended March 31, 2024, as compared to Rs.40,472 million the previous year. EBITDA margin during the year was 50.1%.
Particular |
FY 2023-24 | FY 2022-23 | Y-o-Y Growth % |
| Rs. Mn | Rs. Mn |
||
Gross Revenue |
49,701 | 40,472 | 23% |
EBIT |
12,018 | 8,894 | 35% |
Key Highlights
• Launched Airtel Xstream Fiber First ATL-‘Superfast speed for everyones need with an objective of positioning Airtel Xstream Fiber as a product that could meet all family requirements.
• Airtel launched a high decibel 360? campaign for Airtel Xstream Fiber. With a primary emphasis on home entertainment, this comprehensive campaign aims to raise awareness for Airtel Xstream Fiber and position it as the ultimate solution for big screen entertainment. The campaign was adopted in nine languages including Hindi, Tamil, Kannada, Telugu, Marathi, Gujarati, Bengali, Malayalam and Punjabi, ensuring it resonates with viewers across the country. This multilingual approach reflects Airtels commitment to cater to the diverse entertainment preferences of audiences throughout India. The campaign features characters from popular entertainment shows burst onto the scene, symbolising the plethora of entertainment choices available through Airtel Xstream Fiber. Accompanied by a catchy soundtrack celebrating diverse shows and genres, the campaign highlights the seamless integration of leading OTT platforms and TV channels accessible through Airtel Xstream Fiber.
• Airtel Xstream Play announced that it has achieved
5 million paid-subscriber milestone, further cementing its position as Indias fastest-growing OTT aggregator. The video streaming service crossed this milestone and continues to be the fastest-growing OTT aggregator in the country. Airtel Xstream Play offers Indias largest bouquet of OTT content aggregated on a single app. Customers have access to premium content from partners such as Sony LIV, Lionsgate Play, Chaupal, Hoichoi, FanCode, ManoramaMax, ShemarooMe, Alt Balaji, Ultra, ErosNow, EPICon, DocuBay, Playflix, etc. and can watch 40,000+ movie titles and shows from 20 content partners on the Airtel Xstream app with a minimum recharge of Rs.148.
New innovations
• Launched fixed Wireless access (FWA) to provide home internet via 5G in Fiber dark areas
• Launched Entertainment-lst ladder with HD channels together with regional OTTs across India
• Launched Xsafe (end-to-end home surveillance solution) add-to-bill option for existing Airtel customers, which includes cloud storage and after sales service
• Launched high decibel 360? campaign for Airtel Xstream Fiber. With a primary emphasis on home entertainment, this comprehensive campaign aims to raise awareness for Airtel Xstream Fiber and position it as the ultimate solution for big screen entertainment
Digital TV Services Overview
Airtel Digital TV continues to strengthen its market position with a strong customer base of 16.1 million, on the back of the Companys strategy of simplified pricing and differentiated converged experience to win high-value customers. Airtel DTH is a pioneer in launching innovative products for its customers, along with best-in-class customer service, making it one of the fastest growing DTH operators in India, with operations in 639 districts across the country.
3.0 amendment by TRAI, the Company implemented pricing changes w.e.f. March 15, 2024, and launched new consumer tariffs to comply with the amendments. With this, the Company has further simplified the packaging across markets to win value customers.
| FY 2023-24 | FY 2022-23 | Y-o-Y Growth |
|
Particulars |
Rs. million | Rs. million | 0/0 |
Gross Revenues |
30,448 | 29,450 | 3% |
EBIT |
2,674 | 3,775 | -29% |
Key highlights
• During the year, the Company witnessed strong base addition on its Airtel Black Plans (converged home proposition with services of DTH, broadband and mobile). Airtel Black is Indias first all-in-one solution for homes, enhancing customer convenience with one bill, one customer care number, dedicated relationship manager with amazing value and zero switching cost. With this, Airtel Digital TV has further strengthened its position in converged homes in the country.
• In February 2024, in response to broadcasters releasing new bouquet pricing in accordance with NTO
Management Discussion & Analysis
B2B services
Airtel Business Overview
Airtel Business is Indias leading and most trusted ICT services provider and offers diverse portfolio of services to enterprises, governments, global carriers, OTT players and small and medium businesses. Airtel Business constantly provides innovative integrated solutions, superior customer service and unmatched depth/reach to global markets. Along with voice, data and video, our services also include network integration, data centres, managed services, enterprise mobility applications and digital offerings.
Global Business, the international arm of Airtel Business, offers an integrated suite of global and local connectivity solutions, spanning voice and data to the carriers, Telcos, OTTs, large multinationals and content owners globally.
Airtels international infrastructure includes the ownership of i2i submarine cable system, connecting Chennai to Singapore and consortium ownership of submarine cable systems like South East Asia - Middle East - Western Europe - 4 (SWM4), Asia America Gateway (AAG), India - Middle East - Western Europe (IMEWE), Unity, Europe India Gateway (EIG) and East Africa Submarine System (EASSY). Along with these seven owned subsea cables, Airtel Business has a capacity on 34+ other cables across various geographies.
Its global network runs across 400,000+ Rkms (Including IRU) with over 1200 customers, covering 50 countries and five continents and 200+ India and Global PoPs (Point of Presence). This is further interconnected to its domestic network in India and direct terrestrial cables to SAARC countries, Myanmar and China helping accelerate Indias emergence as a preferred transit hub.
Airtel Business witnessed a year of growth led by a surge in data and digital revenues. Revenues for the year grew by 12% Y-o-Y. The Company continued focus on winning in the core business while building upon new revenue streams and emerging businesses in the areas of loT, IQ, Cloud, Security and Data Centres.
| FY 2023-24 | FY 2022-23 | Y-o-Y Growth |
|
Particulars |
^ million | ^ million | o/o |
Gross Revenue |
208,209 | 185,931 | 12% |
EBIT |
60,205 | 54,361 | 11% |
Key highlights
A. Digital innovations and customer delight
• Airtel Business, has entered into partnership with:
• Adani - Power 20 million Smart Meters
• IntelliSmart - To power upto 20 million Smart Meter along with smart meter applications such as Head End System, Meter Data Management Systems along with Cloud and Analytics
Airtel, through its robust nationwide communications network will deliver reliable and secure connectivity for smart meter deployments. In addition, Airtels transformative smart metering solutions that are powered by NB-loT, 4G and 2G, will help AESL to ensure realtime connectivity and uninterrupted transfer of critical data between smart meters and headend applications. The solution will also come powered with Airtels loT platform - ‘Airtel loT Hub, which enables smart meter tracking and monitoring with advanced analytics and diagnostic capabilities in addition to real-time insights and services that empower customers with enhanced control over their energy consumption
• Airtel announced its partnership with Secure Meters for deploying Narrow Band (NB-loT) services that will power 1.3 million homes in Bihar through a smart meter solution. This deployment will be Indias first NB-loT solution on a narrow band with a fallback option that will work on 2G and 4G and ensure real time connectivity and uninterrupted transfer of critical data
• Airtel announced the launch of Airtel IQ Reach, a first-of-its-kind self-serve marketing communication platform, which will enable brands/companies to drive targeted customer engagements through personalised communications. This self-serve portal will be
a one-stop destination to empower businesses, especially emerging businesses, to have full control of their campaign execution, by simply logging on to a single portal for designing customised messages, uploading or selecting their target audiences, scheduling their messages and, finally, tracking campaign effectiveness, all in just a few clicks
• Airtel business launched, ‘Airtel CCaaS (Contact Center as a Service), an industry first omni-channel cloud platform that offers a unified experience for all contact centre solution required by an enterprise. Currently, businesses with contact center requirements need to source voice, cloud and software separately from multiple vendors resulting
in increased capital and time investments. Airtels innovative CCaaS offering will enable enterprises to reduce these investments significantly, as the platform unifies Voice- as-a-service (VaaS), cloud and the best of contact center software from leading providers including Genesys. The platform will enable enterprises to get started on contact center solutions instantly at affordable monthly cost.
• Airtel Business launched "Airtel Advantage"
- a first-of-its-kind, fully-automated digital platform for global interconnect solutions.
Airtel Advantage enables carriers globally to select interconnect solutions from a diversified set of offerings and get onboarded within a few hours. The one-stop-destination also enables carriers to send traffic to anywhere in the world with just a few clicks. Offering International Voice, A2P, P2A, P2P SMS, Direct Inward Dialing (DID) and International Toll-Free Service (ITFS), the Airtel Advantage portal leverages Airtels resilient global network and digital infrastructure to solve challenges of direct interconnect complexities, tedious procedures and exhaustive paperwork. The platforms assured time to market capability enables faster customer onboarding and seamless commencement of interconnects for multiple global locations. Customers can also view real-time traffic statistics and other insights on customised analytics dashboard
B. Strategic alliances and partnerships
• Airtel Business won a Cloud and CDN mandate from the Digital India Corporation (DIC) to power DIKSHA (Digital Infrastructure for Knowledge Sharing), Indias largest platform for open education digital content. DIC is under the aegis of the Ministry of Education (MoE), Government of India. With this, Airtel has become the trusted partner for end-to-end management of DIKSFIAs online platforms across its mobile application and website. Airtels low latency and high-bandwidth Edge CDN solution will enable students and teachers across 28 states and 8 Union Territories with an access to over a billion hours of free learning content every month in their preferred language
• Airtel entered into a strategic partnership with Bridgepointe Technologies, a tech advisory firm based in US. The partnership will enable US enterprises interested in expanding to India and Africa to leverage Airtels digital infrastructure solution, strong product ecosystem and large customer base in these markets. Bridgepointe will leverage its own established foothold in the data center market and add Airtels products and services including global connectivity solutions, DIA, IPLC, Data center and SD-
WAN as part of its portfolio offerings for the enterprise customers
• Airtel partnered with technology-led innovation start-up, Matter Motor Works to deploy its Airtel loT solution in Matter AERA, Indias first and only geared electric motorbike. Airtel loT will now power 300,000 Matter bikes. In the first phase, 60,000 bikes will be enabled with advanced automotive grade Airtel E-Sims with advanced IOT features, offering a smart and connected
experience on Airtels pan-India superior network. Airtels advanced loT platform, "Airtel loT Flub", will help with the real time tracking of these vehicles, monitoring performance with advanced analytics while maintaining extremely high reliability augmented by telco grade security
* Nxtra by Airtel strengthens its green energy footprint with the commissioning of solar and wind power plants in various states
Nxtra announced a power wheeling agreement with Ampin and Amplus Energy to procure an additional 140,208 MWh of renewable energy. With this, Nxtra has enhanced its existing commitment of reducing its carbon footprint through renewable energy sources annually by 100,389 tC02e. Ampin Energy and Amplus Energy will set up captive solar and wind power plants of 48 MWdc and 24.3 MW, respectively for Nxtras data centres in Tamil Nadu, Uttar Pradesh and Odisha
Awards and recognition
Frost & Sullivan named Airtel as the Indian Cellular loT Services Provider Company of the Year 2023. This incredible accomplishment further establishes our leadership in the loT segment and the constant commitment of our teams in providing dedicated and enhanced customer service.
Management Discussion & Analysis
Africa
Overview
Airtel Africa is transforming lives across Africa. Airtel Africas services are connecting the unconnected, reaching the financially excluded and bridging the digital divide, which helps unlock the extraordinary potential for Africas people, businesses and economies to grow. As an African business, serving the communities in which Airtel Africa people live and work, the Group is a partner in delivering sustainable development objectives in the 14 countries in which we operate. Our products, services and programmes foster financial inclusion, drive digitisation and empower
152.7 million customers and the communities in which they live.
Airtel Africas overall customer base grew by 9% to
152.7 million as on March 31, 2024. The Group continues investing in networks to expand our reach along with the expansion of distribution infrastructure to drive customer base growth in both urban and rural markets. Its enhanced distribution channel ensures availability of SIM cards and recharge across our footprint. Airtel Africas voice traffic grew by 14.9% to 504 billion minutes during the year, driven by customer base growth of 9.0% and an increase in voice usage per customer by 5.2% to 285 minutes per customer per month. Our continued investment in sales and distribution infrastructure and network coverage helped us to grow voice traffic. Further, during the year, we deployed 2,988 sites, reaching 34,500+ sites in total as
on March 31,2024. Airtel Africa added 4,300+ sites on 4G and now95% of ourtotal sites are on 4G. 5G is operational across five countries, with over 1,000 sites deployed.
Airtel Africas mobile money customer base grew by 20.7% to 38.0 million as on March 31, 2024, representing 24.9% of the total customer base. This growth was largely driven by expansion of our mobile money agents and merchant ecosystems and continued investment into our exclusive franchise channel of kiosks and branches. The mobile money transaction value grew by 38.2% to over $112 billion in reported currency. The transaction value per customer reached $262 per month, an increase of 13.1% in constant currency.
In INR reported currency, Airtel Africa revenues stood at Rs.411,841 million compared to Rs.422,664 million in the previous year. The Groups continued focus on operational efficiency and cost efficiency has resulted in EBITDA of Rs.201,016 million for the year compared to Rs.207,281 million in the previous year. EBIT for the year was Rs.135,627 million compared to Rs.141,255 million in the prior year. PBT for the year was Rs.61,197 million compared to Rs.82,569 million in the prior year. Capital expenditure for year was Rs.61,028 million compared to Rs.60,400 million in the prior year.
Financial and operational review
| FY 2023-24 | FY 2022-23 | Y-o-Y Growth |
|
Particulars |
^ million | Rs. million | o/o |
Revenue |
411,841 | 422,664 | 2.6 |
EBIT |
135,627 | 141,255 | 4.0 |
Wireless subscribers - Africa (Mn) -14 countries
A. Key company developments
• On June 14, 2023, the Central Bank of Nigeria (CBN) announced changes in operations at the Nigerian Foreign Exchange (FX) Market, including the abolition of segmentation, with all segments now collapsing into the Investors and Exporters (l&E) window, and the reintroduction of the ‘Willing Buyer, Willing Seller model at the l&E window. As a result of the CBN decision, the US dollar appreciated against the naira in the l&E window. Airtel Africa welcomes these changes as a positive move towards a more stable Nigerian FX market. The market expects the new foreign currency policy and realignment of exchange rates to increase US dollar availability, easing the recent challenges in accessing US dollars
• On January 29, 2024, the FMDO Securities Exchange Limited (‘FMDQ) notified the market of the amended methodology applied for computing the Nigerian Autonomous Foreign Exchange Fixing (‘NAFEX), which sets the exchange rate used to consolidate the results of Airtel Africas Nigeria region. This development further affected the Nigerian naira, resulting in the NAFEX rate at NGN 1,303 per US dollar as of March 31, 2024. The Group remains invested in Nigeria to capture the growth opportunity, and believes this will help facilitate growth, drive further digitalisation across the country, facilitate economic progress and transform lives across Nigeria
• Airtel Networks Limited (‘Airtel Nigeria), made a payment of NGN 58.7 billion ($127.4 million), payable to the Nigerian Communications Commission (NCC), to renew its 2x10 MHz 2100 MHz spectrum licence. This renewal, following the expiry of the previous licence on April
30, 2022, will be valid for 15 years. The move shows Airtels confidence in the opportunities in the Nigerian market and its commitment to supporting local communities and economies by improving digital inclusion and connectivity
• In response to the regulators invitation for application for spectrum in various bands (700, 800, 2300, 2600, 3300, 3500, etc.), Airtel Uganda submitted its application for acquisition of additional spectrum of 10 MHz in the 800 band, 100 MHz in the 3500 band and 500 MHz in the E-band, along with a bank guarantee of $1.5 million on June 07, 2023. Although there is no upfront payment for the spectrum, an annual payment of $1.2 million has to be made for
17 years, the duration of the spectrums validity. On June 26, 2023, the Uganda Communications Commission confirmed that Airtel Uganda Limited had qualified for the award of the 800MHz (2 (2x5)) and 3500MHz (1x1000)
• Airtel Africa announced the cancellation and extinction of all its deferred shares of $0.50 nominal value each (the ‘capital reduction), as approved by its shareholders at the Annual General Meeting of the Company on July 03, 2023. The cancellation and extinction were sanctioned by the High Court of England and Wales (the ‘High Court). The capital reduction is expected to create additional distributable reserves that will be available to the Company going forward and may be used to facilitate shareholder returns in the future, whether in the form of dividends, distributions, or purchases of the Companys own shares
• The Reserve Bank of Malawi (RBM) announced structural changes to the foreign exchange market, adjusting the exchange rate from MWK 1,180 to MWK 1,700 to the US dollar, with effect from November 09, 2023. As part of these changes, RBM allowed dealer banks to freely negotiate exchange rates with their clients and with each other
• In December 2023, Airtel Africa launched Nxtra by Airtel (‘Nxtra), a new data center business committed to meeting the continents growing need for trusted and sustainable data center capacity, and to serving the fast-growing African digital economy. It aims to build one of the largest network of data centers in Africa, with high-capacity data centers strategically located in major cities located across Airtel Africas coverage area, complementing its existing edge sites. Nxtras ambition will allow it to serve the growing needs of African enterprises. Its data center infrastructure will be designed to host advanced computing and offer multi-MW capacity in a phased manner
• On February 1, 2024, Airtel Africa pic announced its plans to begin the share buyback programme worth $100 million over a 12-month period.
On March 1, 2024, Airtel Africa pic announced the commencement of its share buyback programme, following the publication of its nine- month results ended December 31, 2023. The share buy-back programme is expected to be phased over two tranches, with the first tranche commencing on March 01, 2024, and ending on or before August 31, 2024. The first tranche will amount to a maximum of$50 million, with Airtel Africa entering into an agreement with Citigroup Global Markets Limited to conduct the buy-back on its behalf. During March 2024, the Company purchased 7.4 million shares for a total consideration of $9 million
Management Discussion & Analysis
South Asia Overview
Full year revenue of South Asia was at Rs.3,773 million as compared to Rs.2,944 million in the previous year. EBIT losses for the year were reported at Rs.2,258 million as compared to a loss of Rs.1,782 million in the previous year. Capex for the year was Rs.267 million as compared to Rs.979 million in the previous year.
| FY 2023-24 | FY 2022-23 | Y-o-Y Growth | |
Particulars |
Rs. million | Rs. million | 0/0 |
Gross Revenue |
3,773 | 2,944 | 28% |
EBIT |
(2,258) | (1,782) | -27% |
Share of Associates/Joint Ventures
Airtel Payments Bank Limited
Airtel Payments Bank Limited became an associate of Bharti Airtel Limited w.e.f. November 1, 2018. Key operational and financial performance:
Particulars |
Unit : | FY 2023-24 | FY 2022-23 |
Operational Performance |
|||
Monthly Transacting Users (MTU) |
000s | 66,940 | 54,702 |
Total Customers |
000s | 162,431 | 163,690 |
Gross merchandise value (GMV) |
Rs. Bn | 2,631 | 2,016 |
Financial Highlights |
|||
Total revenue |
Rs. Mn | 18,355 | 12,910 |
EBITDA |
Rs. Mn | 1816 | 787 |
EBITDA/Total revenue |
% | 9.9 | 6.1 |
Net Income (Proportionate share of Airte) |
Rs. Mn | 252 | 155 |
Robi Axiata Limited
Robi Axiata Limited is a joint venture between Axiata Group Berhad of Malaysia and Bharti Airtel Limited. ?Key operational and financial performance:
Particulars |
Unit : | FY 2023-24 | FY 2022-23 |
Operational Performance |
|||
Customer Base |
000s | 58,071 | 55,572 |
Data Customer as % of Customer Base |
% | 75.1 | 75.8 |
ARPU |
BDT | 140 | 138 |
Financial Highlights |
|||
Total revenue |
Rs.Mn | 76,759 | 73,084 |
EBITDA |
Rs.Mn | 36,179 | 33,240 |
EBITDA/Total revenue |
% | 47.1 | 45.5 |
Net Income (proportionate share of Airtel) |
Rs.Mn | 822 | 414 |
Indus Towers Limited
Bharti Airtel holds a 47.95% stake in Indus Towers Limited Key operational and financial performance:
Particulars |
Unit : | FY 2023-24 | FY 2022-23 |
Operational Performance |
|||
Total Towers |
Nos | 219,736 | 192,874 |
Total Co-locations |
Nos | 368,588 | 342,831 |
Average Sharing Factor |
Times | 1.7 | 1.8 |
Financial Highlights |
|||
Total revenues |
Rs. Mn | 286,006 | 283,818 |
EBITDA |
Rs. Mn | 146,939 | 97,670 |
EBITDA /Total revenues |
% | 51.4 | 34.4 |
Net Income (Proportionate Share of Airtel) |
Rs. Mn | 28,944 | 9,729 |
Management Discussion & Analysis
SCOT analysis
Strengths
• Dominant player: Indias largest integrated communications solutions provider, second largest mobile operator in Africa, and among the Top 3 globally, with network serving 2 billion people
• Premium brand: Widely known across the geographies and has the ability to drive segmentation and premiumisation
• Expansive service portfolio: Serving 550 million+ customers with diverse offerings across 17 nations, including mobile services, fixed voice, home broadband, digital TV, enterprise solutions, digital services, payments bank and mobile money
• Building digital ecosystem: Offers a wide range of industry-leading digital offerings like Airtel IQ, Wynk Music, Airtel Finance, Cloud, loT, SD-WAN, Airtel Payments Bank, Nxtra Data Center; Company has 220 million MAUs on key digital applications, such as Thanks, Xstream and Wynk; Airtel Payments Bank has ~67 million MTU; in Africa, Mobile Money has a 38 million customer base
• Convergence play: Attracting high value homes with a wide range of bundled offerings, including mobile, broadband, OTT apps and digital TV
• Future-ready network: Amplified investments over the years to create a vast infrastructure for growing connectivity and data needs across markets; building the right tools and platforms to manage network complexity, and deployed across network planning to operations to end-to-end experience management. Top- ranked 5G network for on-demand and live video streaming, gaming, voice app experience and best upload speed (Opensignal Mobile Network Experience Report, Oct 2023)
• Strategic collaborations: Leveraging the Airtel platform to provide extensive consumer and enterprise services through strategic collaborations with leading companies globally
• Omni-channel integration: Capability to seamlessly integrate and manage multiple customer engagement and sales channels, both online and offline
• Robust balance sheet: Ability to generate strong operating free cashflow despite high capex; long-term credit rating at AA+ (Stable) reaffirmed by Crisil
Challenges
• Centralisation of operations: Integrating operations onto a common platform across demographically and geographically diverse regions like India, South Asia, and Africa
• Supply chain and cost inflation: Global disruptions cause supply chain challenges and cost inflation, impacting pace of network and non-network deployment; cost increase could also adversely impact profitability
• Low return ratios: Significantly low ARPU and high capex spends could result into low return ratios
• 5G monetisation: Despite substantial investments in spectrum and network rollout, monetising these investments is challenging in the absence of prominent use cases for customers; currently, 5G data is free for all post-paid customers and prepaid customers with unlimited packs starting from certain price points
• Evolving market trends: Given the rapid technological advancements, emerging needs of B2C and B2B customers across regions, timely adaptation to customer requirements can be challenging
Threats
• Intense competition: Entry of disruptive market players and increased price competition can be detrimental
• Regulatory framework: Adverse regulatory changes, political instability or economic uncertainty can negatively impact business operations
• Currency exposures: Global macroeconomic uncertainties, trade tensions and commodity headwinds can cause currency fluctuations, heightening risk for developing economies
• Pandemic/Disaster/War: War or civil unrest can disrupt country operations; also natural catastrophes, pandemics or similarly uncontrollable phenomenon could cause operational challenges
Opportunities
• Industry structure: Despite market consolidation, industrys growth potential is backed by sustained penetration improvement and potential tariff adjustments
• Tariff repair: Indias mobile ARPU is among the lowest globally and data usage among the highest; given the sectors need for capex investment, tariff increase is vital for long-term sustainability and value creation for stakeholders
• Smartphone penetration: With 200+ million feature phone users, India still provides an opportunity for upgrade to smartphones, creating incremental revenue potential
• Low post-paid penetration: With merely ~4% of total mobile customers being post-paid customers, the segment has strong growth potential, which is being tapped by the Companys differentiated family plans and converged offerings under Airtel Black
• Home broadband landscape: Low penetration of fixed line broadband coupled with growing need for ultrafast and reliable connectivity as well as connected devices, signifies long-term growth potential, which is being addressed by the Company through its expansion of home passes across the country to capture market share
• Emerging enterprise growth avenues: Customer needs are evolving rapidly from traditional connectivity to smart solutions and tailored services, enabling the need for fast paced growth in adjacent revenue streams (loT, SD-WAN, Security, CPaaS, Cloud and many more), in which the Company is actively investing to capitalise on the opportunities
• Digital ecosystem: Airtel has built a suite of digital portfolio including CPaaS, entertainment, music, cloud, security, Airtel Finance and Payments Bank, which can be expanded further with strengthening of digital offerings to address customer needs
Material developments in HR
The year saw accelerated growth for Airtel, with increased penetration in rural areas and further consolidation of its digital capabilities while delivering world-class experience to customers.
Airtels people strategy was guided by the following key priorities to support the overarching business strategy.
A. Organisation and People Effectiveness
Enhancing organisational and people effectiveness was achieved through multiple interventions. The first of these was to align the organisation structure with business priorities. In an extraordinary display of collaboration, Airtel successfully transitioned 3.4k employees from Ericsson managed services, enabling exceptional customer experience. This transition included redefining the organisation structure, fostering cultural assimilation and intensifying dialogue with employees.
Another priority was to set into motion a comprehensive talent plan to build future-ready leaders with the right mix of experience. Career frameworks, capability programmes, and holistic talent principles for focused individual development were put in place. Now the Company implements scientific succession planning for all keyjobs, emphasising on the diversity of experiences.
For Airtels outsourced workforce, it was important to focus on the basics. Tools for automated hiring and lifecycle management were developed and deployed at scale. Having consistent policies and prioritising safety and compliances have been other key focus areas.
B. Inclusion imperative
This was a seminal year for Airtel in increasing womens representation in the workforce, which improved from 11% in FY 2022-23 to 15.8% in FY 2023-24. This was backed by gender balanced hiring, scaling up of new work formats, aligning the Companys infrastructure and policy to promote gender balance, along with creating a culture of inclusion.
To make Airtel a more accessible employer and tap wider talent pools, the Company has doubled its campus recruitment, and transitioned from offering 7 niche programmes to 13 multi-tiered mainstream campus programmes for profiles including general management, technical leadership, key accounts, frontline sales, network specialists, etc.
C. Exceptional employee experience
Airtel adopted multiple technological capabilities for enabling seamless people experience. The Company put in place an automated, data backed, talent
acquisition tool for superior candidate experience and end-to-end lifecycle management tools and processes.
Airtel introduced an employee value proposition #BeLimitless that resonated with both existing employees and potential candidates alike, and resulted in reduced attrition and increased attractiveness to external candidates.
The Companys focus next year will be on enhancing customer experience through its extended workforce, improving employee experience through digital solutions and continuing to accelerate its journey on diversity and inclusion.
For more details, please refer Human Capital section forming part of this report, on page 102.
Internal controls
• Airtel has deployed a robust framework ofinternal controls across the organisation to facilitate efficient conduct of its business operations in compliance with the Company policy; fair presentation of its financial results in a manner that is complete, reliable and understandable; adherence to regulatory and statutory compliances that safeguard investor interest. Followed at the circle and country levels, this framework is assessed periodically, and the performance of circles and countries is measured via objective metrics and defined scorecards
• Accounting hygiene and audit scores are driven centrally through the central financial reporting team and Airtel Centre of Excellence (ACE), both being responsible for the accuracy of books of accounts, preparation of financial statements and reporting the same as perthe Companys accounting policies. Regulatory and legal requirements, accounting standards, and other pronouncements are evaluated regularly to assess applicability and impact on financial reporting. The relevant financial reporting requirements, documented in the Group Accounting Manuals, are communicated to relevant units and enforced throughout the Group. This, together with the financial reporting calendar evidencing the tasks and timelines, forms the basis of the financial reporting process
• Deloitte Haskins & Sells LLP, the Statutory Auditors, have done an independent evaluation of key internal controls over financial reporting (ICOFR) and expressed an unqualified opinion stating that the Company has, in all material respects, adequate ICOFR and such ICOFR was operating effectively as on March 31, 2024
• The Company has in place an Internal Assurance (IA) function headed by the Chief Internal Auditor.
EY and ANB & Co (ANB) are the Internal Assurance Partners of the Company. The internal assurance
plan for the year is derived from a bottom-up risk assessment and directional inputs from the Audit Committee. The Audit Committee oversees the scope and coverage of the IA plan and evaluates the overall results of these audits during the quarterly Audit Committee meetings. Based on approved audit plan, IA partners conduct internal audits to review internal financial, operational, IT, regulatory compliance and anti-fraud controls on a periodic basis. Any material weakness or control gap is presented to the Audit Committee members every quarter wherein management team ensures that the mitigation plans are being implemented to address the weakness/ gap both incidentally and systematically. Additionally, separate quarterly Audit Committee meetings, if required, are also held to review the progress made on the previous gaps identified by Internal Assurance. During these meetings, functional Directors are invited from time to time to provide updates on improvements in controls and compliance within their respective functions and updates on the progress of any transformational projects undertaken
• A CEO and CFO Certificate, forming part of the
Corporate Governance Report, confirms the existence and effectiveness of internal controls and reiterate their responsibilities to report deficiencies to the Audit Committee and rectify the same. The Companys Code of Conduct requires adherence to the applicable
laws and Companys policies and also covers matters such as financial integrity, avoiding conflicts of interest, workplace behaviour, dealings with external parties and responsibilities to the community
The Airtel Centre of Excellence (ACE), based in Gurugram, Bengaluru and Chennai, is the captive shared service for financial accounting. Digitisation of ACE is being aimed as a part of the transformation agenda and includes initiatives such as system- based reconciliation and reporting processes with vividly defined segregation of duties. The Company operates on a single instance of Oracle across all operating units, which ensures uniformity and standardisation in ERP configurations, charts of accounts and finance processes across countries. The Company continuously examines its governance practices to enhance investor trust. Initiatives such as a virtual desktop interface for ultimate data security, self-validation checks, desktop reviews and regular physical verification are producing measurable outcomes through substantial improvement in control scores across India and Africa. Oracle Governance Risk & Compliance (GRC) module has been implemented for India and Africa to strengthen existing controls pertaining to access rights for various ERPs, ensuring segregation of duties and preventing possibilities of access conflicts
Risk and mitigation framework
A determined pursuit of our strategic vision, relentless innovation, customer obsession and commitment to high performance have steered Bharti Airtel to newer heights of success globally. As we expand into newer markets, adopt cutting-edge technologies and forge new partnerships, we must remain vigilant about the emerging threats to our operations. Our Board and leadership team proactively address potential disruptions. A comprehensive risk management framework covering strategic, legal, financial, operational, and climatic risks helps identify critical risks and develop effective mitigation plans to foster a reliable and stable business environment.
Responsibility and accountability
Board of Directors
The Board of Directors at Bharti Airtel is responsible for reviewing the Companys critical risks. The apex body annually evaluates the risk management framework and the Risk Management Committee (RMC) periodically evaluates and assesses the frameworks efficacy. The RMC formulates a detailed risk management framework and monitors its implementation. The Chief Risk Officer, working closely with the RMC, conducts an independent review of the risk assessments and associated management action plans. The Board and RMC then deliberate, deliberates on and approves these action plans that can effectivity mitigate risks for the Company.
Airtels management
The CEOs of Airtel businesses in India, South Asia and Africa (AMB and Africa Exco) are responsible for managing the strategic risks that may impact their operations.
These risks are generally identified by their Circle teams, the national level leadership and teams from the international operating companies. The management team draws on internal audit reports to identify risks, and keeps a keen eye on the internal and external environment to ascertain developments that could pose material risks to the Company.
Operational teams
The Executive Committees (EC) of Circles in India and operating companies from international operations manage risks at the ground level. The EC has local representation from all functions, including central functions like Finance, SCM, Legal & Regulatory, and customer-facing functions, like Customer Service, Sales & Distribution and Networks. The Circle CEO or Country Managing Director is responsible for engaging functions and partners to manage the risks. They also identify risks and escalate those to the central teams for agreement on mitigation plans.
Risk identification process
• Scan the entire business environment - internal and external - for potential risks
• Classify the various risks by probability, impact and nature
• Develop objective measurement methodology for such risks
• Fix accountability of people and positions to implement mitigating action plans
• Agree on detailed action plans to manage key risks
• List and prioritise key risks to be addressed and managed
• Approve resources, including budgets, for risk management
• Review the progress of action plans, take stock of gross and net exposures and mandate corrective actions
• Report progress to the Board and the Audit Committee/Risk Management Committee
• Report specific issues to the Audit Committee/Risk Management Committee
Risks that may Impact the Company
Potential Risks |
Risk Type | Risk Definition |
Regulatory and political uncertainties |
Legal and Compliance |
Airtel operates in India, Sri Lanka, and 14 African countries which are prone to political instability, civil unrest, and regulatory changes and hence, pose significant business risks. These conditions impact the overall business environment, with potential threats emanating from regime uncertainties, regulatory changes, spectrum price hikes, and stringent verification norms. |
Economic uncertainties |
Operational | Airtels strategy targets growth in emerging markets with low mobile and internet penetration, despite challenges like inflation, currency fluctuations, and economic downturns. These conditions, coupled with foreign currency borrowings at floating rates, pose risks to earnings and cash flows. |
Poor quality of networks and information technology including redundancies and disaster recoveries |
Operational | Telecom networks face risks from technical failures, connectivity issues, human errors, natural disasters, and partner issues, impacting financial stability and service delivery. The dynamic IT landscape increases dependency on skilled staff and technology upgrades. |
Fiercely competitive battleground |
Operational | The telecom market is highly competitive, with operators vying for high-value customers through quality networks, competitive pricing, and focusing on 5G expansion. Airtels competitors are also investing heavily in exclusive online content to attract users. |
Increase in cost structures ahead of revenues thereby impacting liquidity |
Operational/ Strategic |
Across markets, rising costs — from expanding infrastructure and inflation to wage hikes and energy expenses—are squeezing margins and cash flows, increasing leverage. Despite this, investment in network quality, distribution, and customer service upkeep must be prioritised. |
Data loss prevention |
Operational | Loss or leak of personal data poses serious challenges to privacy, making data protection pertinent. Airtel aligns with regulations such as Indias Digital Personal Data Protection Act, thus mitigating financial risks. |
Inability to provide high quality network experience with exponential growth in data demand |
Strategic | Telecom companies must invest heavily in data capacities and broadband expansion to meet rising customer demand and maintain competitiveness. To retain technology-agnostic consumers, they are offering unlimited voice, generous data benefits, and ensuring seamless mobile internet experiences. |
Gaps in internal controls |
Financial and non-financial Operational | Gaps in internal controls and/or process compliances could lead to wastages, frauds and losses, resulting in penalisation and compliance gaps that may adversely impact brand reputation. |
Lack of digitisation and innovations |
Strategic | The failure to adopt new and emerging technologies on which telecom services, and other associated services through apps, platforms, mobile financial services depend, could severely impact Airtels delivery on customer expectations and its competitiveness. |
Climate Change and energy management |
Strategic | Escalating climate change, leading to natural disasters or extreme weather conditions may result in degradation of telecom infrastructure, affect service availability and quality, increase business costs, affect maintenance and repair operations, and pose health and safety risks to personnel. |
Read more about the Risk definitions and their mitigation in the Risk Management chapter
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