Bharti Airtel Shares up for the 2nd Straight Day; To Exits Low-Margin Voice, Messaging Business

As per news reports, Bharti Airtel is exiting its low-margin voice and messaging business to concentrate on high-growth areas like 5G, IoT, data centers, and cloud services. This strategic shift aims to improve profitability, despite impacting its top line in the short term.

Overview of Airtel’s Strategic Shift

In a strategic move, Bharti Airtel, a leading telecom operator, has announced its exit from the low-margin commodity voice and messaging business.

This decision, shared by Gopal Vittal, the company’s Vice-Chairman and Managing Director, was made to allow the company to focus on more profitable and growth-oriented segments, such as IoT, data centers, cloud services, and connectivity solutions.

Although the exit will lead to a short-term impact on the company’s top line, Airtel clarified that there would be minimal effect on EBITDA due to the marginal contribution of this segment. Instead, the company is reallocating its capital expenditure to strengthen its 5G infrastructure.

Airtel’s Focus on 5G Growth

Airtel’s efforts to expand its 5G services come as the demand for mobility and fixed wireless access (FWA) rises. The company has shifted its focus toward rolling out more 5G radios, a strategy to meet the growing demand in the market.

Additionally, with India’s average revenue per user (ARPU) still the lowest globally, Airtel has called for tariff repairs to ensure financial stability and sustainable growth in the sector. With this transition, Airtel is positioning itself for long-term growth in digital services, moving away from the low-margin segments and focusing on the high-potential areas that promise higher returns.

Share Price Performance

Bharti Airtel’s stock is trading at ₹1,687.90 at 10:40 AM on the NSE, marking an increase of ₹11.15 or 0.66% from the previous close of ₹1,676.75. The stock opened at ₹1,698.85 and reached a high of ₹1,700.00 before dipping to ₹1,679.70.

Bharti Airtel’s stock has continued its positive momentum, adding to the 3.5% gain recorded yesterday.

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