On capital allocation, would you intend to further increase stake in Airtel Africa or Indus Towers and is there a minimum net debt to EBITDA threshold beyond which surplus capital would be used to pay a dividend? Also any colour on how much lower FY2026 capex can be, and the reason for the surge in Airtel Business capex in Q4?
The Airtel Business Q4 capex spike was driven by Cloud (going to market in June) and additional data center investments, otherwise business as usual; FY2026 capex will trend downwards as rural rollout slows substantially though specific quantum cannot be shared. On Africa, Airtel will look to buy more given its growth (almost 2x India), strong dividend, and the GBP-denominated foreign exchange hedge from buying earlier at 132 pence vs current 170+ pence; Indus has no buyback plans currently but a committee is reviewing dividend/buyback options. Airtel wants complete flexibility on cash deployment via balancing debt, dividends, buybacks, and selective investments.
Any minimum net debt to EBITDA threshold or do you have complete flexibility there as well?
The company will continue to deleverage by paying off high-cost spectrum debt to lower interest burden, while simultaneously stepping up dividend. No specific threshold is being set.
Is there scope for formalization of dividend policy as a percentage of net income or FCF? What kind of traction are you seeing in FWA in terms of subscriber adds, and where are we on the transition to 5G SA?
There is no specific dividend policy being announced beyond the stepped-up dividend already declared, with cash deployed flexibly between deleveraging, dividends, and growth investments. On FWA, about 40-45% of overall home net adds are coming from FWA but the strategy prefers fiber as superior technology, with home additions targeted to step up beyond the 812,000 net adds this quarter. On 5G SA, transition will happen prudently after 4G traffic is offloaded to 5G, and FWA will likely be the first port of call for SA before mobile.
Why is mobile capex sort of moving up in Q4 - is it just seasonality like a year-end push or something more?
One should not read too much into quarterly variations as they can reflect seasonality or material timing; the important view is full-year capex which will certainly come down next year.
On the wireless side in Q4 capex was back to a higher run rate without meaningful tower/base station additions - was there core-side investment or has SA investment begun? On homes, will the higher capex be sticky into FY2026 given accelerated rollout intent?
One should not read too much into Q4 capex as some equipment came in late in the quarter; full-year FY2026 capex will trend downwards. On homes, fiber rollout capability is the constraint and the company would like to see it step up materially, though this will not significantly impact overall capex profile given the small absolute amount; targeting well above 2.5 million home passes per quarter vs the 1.7 million done.
On data center you seem very confident with a release indicating doubling capacity in three years - can you elaborate? Are any capex numbers disclosed for next three years?
Significant capacities are coming on board in FY2026 and FY2027 from investments made over the last 24 months and continuing over the next 8-9 months, plus discussions with very large players to accelerate further. No separate capex numbers are disclosed but spend is roughly in line with prior periods possibly slightly higher and rolled into overall company capex. The previously mentioned ~Rs.5,000 crores doubling programme remains on track.
Vodafone Idea has launched 5G services and is investing in its network - are you seeing impact on postpaid additions and could the market share gains trend slow down?
Without commenting on competitors, postpaid net adds have been around 600,000 per quarter for the last two quarters as the post-tariff-repair effect normalized, and these should step up in coming quarters given the large base of high-value users and the family-plan opportunity to aggregate household members across operators.
You announced a second buyback in Africa and indicated commitment - would you look to delist the business? What is the plan for Airtel partly paid?
On Africa, the company will not get ahead of itself - it remains a terrific GBP-denominated dividend-paying asset and the buyback opportunity will continue. On the partly paid shares, there is no requirement to call them at this point and they will be called only when needed.
Is there an aspirational capex-to-revenue ratio Hexacom can reach over time, perhaps sooner than Airtel given lighter business mix?
Hexacom does not have high-investment businesses like Nxtra or submarine cables so investment is lighter, but it also lacks pan-India digital businesses, making strict comparison with global peers (which match Airtel's verticals) difficult; it remains a mobile-first, mostly mobile-only business. Directionally, absolute capex will come down without compromising required growth capex including home fiberization.
Is data center an opportunity which you would pursue in a more focused manner within the company?
Data center has been a modest area for Airtel with less than 12% market share which the company is not pleased with; significant capacity is in the build stage and will come on board over the next 18 months. Airtel is also having conversations with multiple very large players to explore additional ways to step up the data center business.
How are you thinking about free cash flow deployment for next year given multiple debt prepayment opportunities, and can you comment on the AGR conversion you have applied for?
On AGR conversion, Airtel sought a non-discriminatory level playing field on the option to convert; whether to convert is a Board decision but the option clarification was the key ask. Harjeet added that free cash flow is increasing, India leverage is still slightly higher at 2.5 (vs Africa low and Indus very low) so deleveraging of India remains important; further high-cost DoT and perpetual bond prepayment opportunities will continue along with first-time DoT installments due after the four-year moratorium.
On home services, is there opportunity beyond FTTH/FWA and content - smart home, security, storage - to expand the addressable market within the home? On AI, why not deploy GPU as a service given your strong portfolio and understanding to be more economical on enterprise side?
Airtel launched home surveillance/security cameras two years ago and acquired about half a million sticky customers, but the business is niche with low ARPU and high effort, so the company is going slow to focus on capturing disproportionate share of home broadband first. On AI, Airtel is embedding AI at the heart of its business but on GPU-as-a-Service it has decided to be a fast follower rather than early mover given rapid evolution of chip cost/quality, and has parked that opportunity for now.
DTH subsidies will be removed - if 89 million high income households shift to home broadband IPTV, will DTH lose relevance in coming years?
DTH faces challenges from technology disruption (IPTV+broadband), regulatory asymmetry (price-fixed DTH vs unregulated broadband, vs cable), and free Doordarshan/free dish content, but there will still be 150-160 million TV homes with broadband only reaching 75-80 million in five years, leaving a large linear-TV pool for DTH. The brave call to strip subsidies has been taken and competition is expected to follow.
On tariff architecture - what are the possible options given industry has to move together; can the next tariff hike be more from a change of architecture? On capital allocation, with potentially Rs.150,000 crores of free cash over three years, are you looking at any large areas of investment in India or outside even after dividends and buybacks?
On tariff architecture, entry-level pricing should not go up much but middle-tier data allowances should reduce dramatically to drive upgrades from small to extra-large plans; India price ratio is 100:250 vs Indonesia's 100:500 illustrating the room for stratification. On capital, Airtel will generate substantial free cash and management requests flexibility to balance deleveraging, dividend step-up, buyback (Indus or Africa or other expansion/acquisition) while remaining fiscally prudent.
On Bharti Hexacom wireless - Rajasthan being 80% of revenue typically has higher incoming due to tourists in Q3/Q4 but the seasonality difference between Hexacom and Airtel is small - is something missing? On home broadband, has FWA salience for difficult-terrain Rajasthan and Northeast circles driven the strong 10% sequential growth? On dividend payout ratio of 33-34% vs Airtel's 35%, with stronger net debt position, any reason for Hexacom to be conservative?
On in-roamers, as Hexacom grows share with a larger base the absolute traveler count does not rise proportionately so seasonality impact may marginally trend down in percentage terms. On homes, FWA is indeed a very strong offering for Hexacom and the lion's share of Q4 home acquisitions came via FWA given the lack of wired broadband in large parts of these two circles. On dividend, the marginal 33-35% gap should not be over-read - Hexacom lacks Airtel's other growth engines so cash will be balanced prudently across objectives including possible early prepayment of FY2021/FY2022 spectrum at 7.2% if interest rates fall.
On Bharti Hexacom incremental EBITDAaL margin which is around 70% despite 5G costs - without a tariff hike, how should we think about FY2026 incremental margins? Any colour on capex trajectory for the two segments?
This was a low-opex quarter and costs like tower-anniversary escalations, energy and the WOW project will continue to push costs up; Q3-Q4 post-tariff-hike is more representative, but EBITDAaL margins should improve in future given most rural rollout is done. On capex, Hexacom capex will trend downwards from FY2025 since the transport job in these two circles is not very large.
On premiumization for Bharti Hexacom, is it different versus Bharti Airtel at aggregate level given these are relatively lower income circles?
The premiumization job is the same with a different path; postpaid penetration is low in these circles though absolute affordable customers are similar, and FWA can become big in Northeast given high education levels. Airtel-Hexacom ARPU gap has narrowed (Airtel 245, Hexacom 242), nuances differ (e.g., focus on data top-up vs international roaming) but the quality-customer job is valid.
Given FWA's salience for these two circles and that FWA eventually requires SA, is there a plan to accelerate the SA transition in Hexacom versus Airtel?
There is no acceleration target; SA transition is a function of 5G infrastructure capacity utilization and currently there is adequate capacity for FWA rollout. As FWA capacity gets choked, options include laying fibers to free capacity or moving to SA, but Hexacom is some distance away across both circles and not racing to a deadline.
Is the fiber for these two circles residing in the Airtel homes segment or in the mobile segment?
It is mostly sitting in the mobile segment.