New Delhi [India], November 23 : Bharti Airtel's earnings and cash flows are expected to rise over the next 24 months, benefitting from the industry-wide raise in mobile tariffs, asserted S&P Global Ratings.
The global rating agency revised its rating outlook on Bharti Airtel to positive from stable.
According to the rating agency, the positive outlook reflects the likelihood of an improvement in Bharti Airtel's stand-alone credit profile owing to its healthy earnings and easing leverage.
"However, an upgrade of the company could remain contingent on a similar action on the sovereign rating on India," the rating agency said in a statement.
There was a hike in mobile tariffs in India earlier this year. Prices of the company's mobile plans were up 10-21 per cent effective July 4, 2024.
S&P Global Ratings also anticipate higher earnings from Bharti Airtel's home and enterprise segments owing to increased uptake of home broadband and enterprise digitalization.
"Most of the benefit of the tariff hike will likely materialize within the next two quarters as existing plans play out their remaining validity periods. In our view, telecom companies (telcos) will likely lose some subscribers after the tariff hike because the higher costs will push some consumers to reduce the number of SIMs they hold," it said.
Some of the gains from the tariff hike are already reflected in Bharti Airtel's performance in the quarter ended September 2024.
The company's average revenue per user (ARPU) for the quarter was Rs 233, up 10.4 per cent from the previous quarter, while net subscriber loss was less than 1 per cent.
The strength in Bharti Airtel's Indian operations will more than offset a currency-led decline in the Africa segment, it added.
Airtel is a global communications solutions provider with over 550 million customers in 15 countries across India and Africa. The company also has a presence in Bangladesh and Sri Lanka through its associate entities.