Bharti Airtel: Survivor To Digital Powerhouse 📞

“Bharti Airtel has become one of the top 10 most valuable companies on the Indian stock market” - yet another milestone for this 30- year-old telecom giant.

For a company that has faced struggle after struggle, its Average Revenue Per User is Rs. 245/month - the highest in the country and among the best in the world!

The Airtel story isn’t just a tale of towers and tariffs - it’s a masterclass in resilience, reinvention, and relentless execution. Act I: Betting on a Billion Dreams (1995–2010)

Let’s travel back in time to the late 70s, when the budding first-generation entrepreneur by the name of Sunil Bharti Mittal, the son of a respected politician, began building businesses at the nimble age of 18, from bicycle parts to push-button phones, all of it leading up to the 90s.

This is when the government started auctioning cellular licenses to telecom operators, and with his quick wit, Mittal was able to grab one up by 1992, and started Bharti Cellular by 1994, launching its first mobile service in Delhi (at this time, most players were city/state specific, barring BSNL).

What happened over the next 15 years was nothing short of business genius, as Mittal capitalised on every possible avenue to grow Airtel’s business, whether it was:

• the National Telecom Policy 1999 (which waived off high license fees and switched to a revenue-share model between operators and the government),

  
  

• the shift from premium to mass-market as more people saw the need for telecommunication and handsets,

  
  

• and various marketing efforts to scale exponentially, like the “Express Yourself” campaign for which A.R. Rahman composed the tune, inciting aspiration among the nation to own phones.

While the nation was adding 15 million subscribers every month (more than the population of Greece), Airtel rode that wave and became a beacon amid the competition.

Clearly, Airtel made all the right moves, making it the largest and most profitable operator by 2010,  crafted by a beautiful business model that focused on certain key areas:

• Being Innovative: First to launch 2G, rapidly expanded into rural areas with 500,000+ towers while everyone else worked on urban.

  
  

• Asset-Light Outsourcing: Pioneer in outsourcing network management (to Ericsson, Nokia, and later Alcatel-Lucent), focusing capital on customer acquisition and marketing.

  
  

• Unified Brand: Rebranded all products and operations under Airtel and heavily marketed the same.

By 2010, the nation stood at just short of 500 million subscribers - and then came the first plot twist for Airtel - the 3G Auction, and a swarm of competitors with it.

Act II: Cutthroat Competition (2010–2015)

The 2010 3G auction saw operators spend over Rs. 67,000 crore, with Airtel spending Rs. 12,295 crore themselves. New entrants like Telenor, Tata Docomo, and MTS triggered a price war, with per-second billing slashing ARPU and margins.

India soon had the world’s lowest mobile tariff at around Rs. 0.5/minute, with Gopal Vittal (CEO), describing the market as “a battlefield where everyone is bleeding, but nobody’s winning” - but clearly, that is not entirely true.

The market consolidated heavily, with 5-6 operators shutting down, while the nation’s subscriber base crossed 900 million in just 5 years! Once again, Airtel pulled through it, owing to:

• Diversification: Airtel entered DTH, enterprise, and broadband, and made a bold US$ 11 billion acquisition of Zain Africa in 2010, becoming a major player in Africa.

  
  

• IT Outsourcing: Expanded outsourcing to IT (IBM, Alcatel-Lucent), driving further cost savings and operational focus.

  
  

• First-Mover in 4G: Launched India’s first 4G service in Kolkata in 2012, ahead of peers.

While this much turmoil would’ve been enough to prove its guns, Airtel was yet to meet the final boss that would really shake up the industry in a way that’s never been seen before - Jio.

Act III: The Jio Tsunami (2016–2019)

Reliance Jio’s 2016 launch (free calls, ultra-cheap data) slashed data prices from Rs. 250/GB to Rs. 10/GB. The industry ARPU collapsed, and over ten operators exited or merged, as Jio’s US$ 30 billion capex plan made Airtel look like an ant.

So much so, that the CFO at the time stated that “We are fighting for survival. This is not a price war, it’s a war of attrition”, and the subsequent carnage led to 3 players left standing, as ARPUs in the industry went from Rs. 120 on average to Rs. 70!

Jio’s disruptive model forced Airtel to reinvent. While others crumbled, Airtel’s adaptability and scale kept it afloat, coupled with:

• Consolidation: Airtel acquired Telenor, Tata, Videocon, Tikona, shoring up its spectrum and subscriber base.

  
  

• Premiumisation: Focused on high-value users, cut loss-making segments.

  
  

• Digital Pivot: Launched Wynk, Xstream, Airtel Thanks, and Airtel Payments Bank (2016), building a digital ecosystem.

With one final leg left, we reach the last act that brings us to the present day, with yet another string of unprecedented challenges that Airtel had to wade through.

Act IV: Recovery and Reinvention (2019–2025)

Turns out that scaling up at such a large pace has its consequences - Rs. 1.6 lakh crore worth of debt in spectrum dues, at interest rates as high as 10%! This meant Airtel’s next and latest challenge was repaying debt as fast as they could - and boy did they do that!

With their wireless business’ cash flows (generated more cash flows than the entire company did 5 years ago), hiking of tariffs by 30-50%, and its unending ability to remain resilient, have resulted in this streamlining, with Debt-to-EBITDA going from 2.1x to 1.3x.

Cut to present day, and this is how the companies stand:

Airtel’s ARPU is now 21% higher than Jio’s and 50% higher than Vi’s. Its EBITDA margin leads the industry, reflecting successful premiumisation, digital convergence, and cost discipline.

Airtel’s journey is the stuff of legend: from a startup betting on a billion dreams, to a market leader nearly wiped out by a price war, to a digital powerhouse setting the pace for the industry. With a whole new world of challenges ahead, it is safe to say that Bharti Airtel is just built different!