Bharti Airtel Ltd on Wednesday said that it can make all necessary adjusted gross revenue (AGR)-related payments even as it expects the government to extend it the same relief as any other telecom operator, in an indirect reference to the distressed Vodafone Idea, whose spectrum dues were converted into equity.

“We have written to the government to extend the same relief as any other telco but that is a decision that the government will take and we will abide by whatever decision they take,” the company’s vice-chairman and managing director Gopal Vittal said on an analyst call following  the June-quarter results. “To that extent, I would say we have the room to make whatever payments are required.”

Vittal’s comments come at a time when the four-year moratorium on AGR payments is set to expire in September, with annual installments for operators — including Airtel and Vodafone Idea — beginning in March 2026. 

In April, Airtel had urged the department of telecommunications (DoT) to convert its AGR dues of about ₹40,000 crore into equity, which would give the government a 3-4% stake in India’s second-largest telecom operator. The company did not disclose whether it has heard back from the government on its proposal. To be sure, in May, the Supreme Court had dismissed pleas by Bharti Airtel, Vodafone Idea, and Tata Teleservices seeking a waiver on interest, penalty, and interest on penalty on pending AGR dues.

AGR represents a portion of a telecom company’s gross revenue that is considered for regulatory payments. Telcos pay 8% of AGR as licence fee to the government, inclusive of contribution to the Digital Bharat Nidhi fund, which is at 5% of AGR.

Within the next one year, Airtel has a deferred payment liability for AGR of ₹5,054 crore, in addition to ₹538 crore in deferred payment liability for spectrum, according to the company’s FY25 annual report. Over the next five years, Airtel has a total deferred payment liability including AGR and spectrum of ₹51,243 crore, as per the report.

Airtel’s request for equity conversion came after the government in March converted Vodafone Idea Ltd’s (Vi) ₹36,950 crore worth of spectrum dues into equity.

In May, Bharti Airtel had said the proposal to the government on converting its revenue-linked dues into equity was only intended to explore if such an option was available.

For a level playing field

“We just wanted a non-discriminatory level-playing field in terms of an option to convert,” Vittal had said then. “Whether we will convert or not is a decision for the board to take… We wanted a clarification from the government whether we had the option or not.”

Bharti Airtel generated an operating free cashflow of ₹990 crore in the April-June period, a growth of 67% year-on-year (YoY). In fact, the company generated an operating free cashflow of ₹55,300 crore in FY25.

When asked about capital allocation plans, Vittal said that the company is looking at enterprise business for growth and will invest in areas such as security, cloud, data centre businesses. Also, “we will certainly look to step up dividend over the years,” Vittal added.

Airtel’s focus on the enterprise side with new areas such as cloud has come at a time when it is seeing a weakness in revenue from the B2B business as it is shedding low-margin wholesale commodity voice and messaging business. In the June quarter, revenue from the segment fell 7.7% year-on-year and 4.9% quarter-on-quarter to ₹5,057 crore.

On 4 August, Airtel announced its sovereign cloud offering amid growing focus among Indian enterprises on securing sensitive data.

“It (cloud) is a very large market. It’s also growing rapidly. In the market that we are playing in and the service that we’re offering, we estimate that this market could well be in the ballpark of ₹60,000 crore,” Vittal said, adding that the company is now bringing a change and will start putting artificial intelligence (AI) in its digital platform. He, however, did not share much details on the same.

Bharti Airtel on Tuesday reported a steady earnings growth in the June quarter, driven by a surge in mobile data consumption and an expanding premium subscriber base. The telco’s average revenue per user (Arpu) climbed to an industry-leading ₹250, as it continues its recovery from years of low tariffs.

In the June quarter, Bharti Airtel’s net profit rose 43% from a year earlier to ₹5,948 crore. On a sequential basis, however, Airtel’s net profit fell 46% from ₹11,022 crore in the preceding quarter, when it had received a deferred tax benefit of ₹5,913 crore. The company’s Q1 revenue of ₹49,463 crore was 28.5% higher from the previous year, and 3.3% higher from the March quarter.

Without giving any indication on the next tariff hikes, Vittal said the feature-phone-to-smartphone upgrades, prepaid to postpaid upgrades, data monetization, and international roaming continue to be central to the company’s Arpu growth.

Talking about further Arpu growth, Vittal said the headroom continues to be there and the drivers of the same continue to be intact.

Abysmal int’l roaming penetration

“The penetration of international roaming is still abysmally low. The penetration of postpaid is still very low. While we are adding close to 60% of net adds on postpaid, the fact is that the base is only 7-7.5% (of the total base),” Vittal said, adding that there are 90 million consumers who could be on postpaid, and 70-75 million feature phone users on the company’s network are ready to upgrade to smartphones.

The telecom operator added 700,000 postpaid users in the June quarter, taking its overall user base to 26.6 million.

In the home broadband space, Airtel has set a target to increase its home broadband pass network to 2.5 million a quarter from a run rate of 1.6 million currently.

“I would continue to underscore that actually the best way to connect the home is through fiber, so our focus is to actually step up more and more fiber home passes,” Vittal said, adding that fixed wireless access (FWA) that uses 5G for home broadband connectivity will complement the pace of additions.

Homes business, which includes home wi-fi, broadband and TV connectivity, saw revenue rising by 25.7% year-on-year to ₹1,718 crore during the three months though June. “During the quarter, accelerated expansion of our Fixed Wireless Access (FWA) network resulted in total WiFi net addition of 939,000 customers, bringing the total customer base to 11 million,” Airtel said in the earnings statement.

When asked whether Airtel will use unlicensed band radio (UBR), which Jio had announced in July, Vittal said the company has done some trials of the same and it will see where it can deploy. UBR refers to wireless communication devices operating on radio frequencies that do not need a specific licence from the government.

UBR is a new technology that works at the backend to connect homes with broadband. It is an alternative to providing home broadband on fiber and using 5G. The UBR technology works like a radio station, sending internet wirelessly from a central antenna placed on a tower to multiple homes or buildings at the same time. This is called unlicensed as it uses free radio waves or open spectrum, such as the 5 GHz band that is allowed for licence-free use.

According to Vittal, UBR can definitely work in areas where the density of the customer base is very low on fixed broadband. However, in urban areas it could face interference issues and could lead to user churn owing to poor experience, he added.