Four years after its 5G debut, Bharti Airtel reports difficulty in charging premium prices as consumers find little difference from 4G services. While the company has invested over ₹1.45 trillion in capital spending since 2023, it now looks to fixed wireless access and tariff reforms to improve returns on its large investments.
Bharti Airtel Ltd. is navigating a difficult phase in its technology rollout, as highlighted in its latest annual report for FY26. Despite massive investments in spectrum and infrastructure, the company noted that consumers currently see no clear reason to pay extra for 5G services over existing 4G plans. This disconnect has slowed the company's ability to recover the costs associated with its aggressive network expansion.
Investment Scale and Capital Spending
Between fiscal years 2023 and 2026, Bharti Airtel invested approximately ₹1.45 trillion in capital projects across India, largely to support its 5G network. This follows the company's commitment of ₹43,084 crore in the 2022 spectrum auction. These heavy investments are now a point of focus for investors, as the company works to improve its return on capital. The financial burden is compounded by global supply chain disruptions and rising costs, which the company noted could continue to exert pressure on profit margins if the high spending on network infrastructure does not lead to higher average revenue per user.
Strategy for Revenue Growth
To address these hurdles, Airtel is shifting its strategy toward non-mobile revenue streams and service improvements. The company is prioritizing Fixed Wireless Access (FWA) as a major growth area for home broadband, especially in regions where fiber connectivity is limited. Additionally, Airtel aims to increase its postpaid subscriber base, which stood at 29 million as of March 31. By migrating more users to postpaid plans and encouraging feature phone-to-smartphone upgrades, the company hopes to create a more stable revenue flow.
Industry Context and Future Monitorables
Bharti Airtel currently counts 188 million 5G users, which lags behind competitor Reliance Jio's 268 million subscribers. Industry analysts at JM Financial noted in a recent report that the entire telecom sector is under pressure to perform 'tariff repair,' or price increases, to justify these large 5G investments. These analysts estimate that a 12-15% tariff hike may be necessary within the next few months to improve financial health. For investors, the primary monitorables remain the success of 5G monetization attempts like the 'Fast Lane' service, the pace of enterprise 5G adoption, and whether future tariff hikes can successfully boost profitability without leading to subscriber churn.