Bharti Airtel\u2019s ambitious and aggressive expansion plans in home broadband, data centres, and wireless fifth-generation (5G) services may start a fresh capital expenditure (capex) cycle for India\u2019s second-largest telecom operator from fiscal year 2027, and impact its free cash flow (FCF) generation, according to JP Morgan. <\/p>\n
Airtel’s capex had a hit a peak in Q1FY24, but has been moderating for the last eight quarters, driven by a reduction in 5G spends. This had led analysts to estimate that the telco\u2019s capex may further moderate in FY26 and FY27, sharply lifting its FCF. <\/p>\n
\u201cThis has made Airtel a stock market darling and the best performing megacap (>$100 billion market cap) year-to-date. However, ambitions to accelerate broadband growth in a land-grab, build a 1GW data centre, and early signs of 5G capacity constraints suggest sharp risks to this assumption,\u201d JP Morgan said in a research note on Thursday, a copy of which has been reviewed by ETTelecom. <\/p>\n
As per the brokerage, Airtel\u2019s incremental market share in home broadband has dropped to 25% in Q2FY26. The Sunil Mittal-led telco\u2019s top executives said it plans to focus on the homes, including fibre-to-the-home (FTTH) and fixed wireless access (FWA), to tap growth opportunities. <\/p>\n
Airtel added nearly 1 million home connects and 2.5 million home passes, a trajectory that it expects to continue in the coming quarters. Rival Jio, by contrast, added 3 million home connects in the quarter that September 30, 2025. <\/p>\n
\u201cAccounting for a $29 per home pass and $100 per home connect cost, we expect a >30% upside in our FY27 Homes capex numbers and a >100% upside should Airtel speed up its broadband (FWA+FTTH) rollout to a pace similar to Jio (~3 million a quarter),\u201d the brokerage said. <\/p>\n
Airtel, along with Google and Adani Enterprises, has also joined forces to build an artificial intelligence (AI) data centre in Visakhapatnam, Andhra Pradesh, with a combined investment of $15 billion (\u20b91.25 lakh crore) over the next five years. <\/p>\n
During the September quarter post-earnings call, Airtel executives upgraded prior plans to increase Nxtra capacity by 500MW to quadruple over the next few years. \u201cAt a build cost of \u20b9400 million (\u20b940 crore)\/MW, we anticipate Airtel Business\u2019 capex to rise by \u20b955 billion (\u20b95,500 crore) in FY27,\u201d according to the brokerage. <\/p>\n
The brokerage also noted that Airtel\u2019s pan-India 5G download speeds have fallen behind Jio, after over 1.5 years of dominance. It cited data from network testing firm Opensignal, which found that Airtel\u2019s pan-India 5G availability has dropped to 27.7% in September \u2013 down from a peak of nearly 30 \u2013 even before a full national rollout has been completed. <\/p>\n
\u201cThis drop in network quality suggests it may be hitting capacity constraints even as 5G user penetration has reached a comparable 46% on a lower spectrum and rollout footprint vs Jio,\u201d according to JP Morgan. <\/p>\n
It said that the findings suggest that Airtel may need to increase wireless capex to meet network demands. \u201cIn our stress scenario, we modestly assume FY27 wireless capex heads back to FY25 levels to accommodate capacity needs.\u201d <\/p>\n
These scenarios, JP Morgan said, could mean up to 56% upside risk to Airtel\u2019s FY27 capex estimates and a 32% drop in its FCF.<\/p>\n","protected":false},"excerpt":{"rendered":"
Bharti Airtel\u2019s ambitious and aggressive expansion plans in home broadband, data centres, and wireless fifth-generation (5G) services may start a fresh capital expenditure (capex) cycle for India\u2019s second-largest telecom operator from fiscal year 2027, and impact its free cash flow (FCF) generation, according to JP Morgan. Airtel’s capex had a hit a peak in Q1FY24, but has been moderating for the last eight quarters, driven by a reduction in 5G spends. This had led analysts to estimate that the telco\u2019s capex may further moderate in FY26 and FY27, sharply lifting its FCF. \u201cThis has made Airtel a stock market darling […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-977322","post","type-post","status-publish","format-standard","hentry","category-telecom"],"acf":[],"_links":{"self":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/977322","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/comments?post=977322"}],"version-history":[{"count":0,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/posts\/977322\/revisions"}],"wp:attachment":[{"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/media?parent=977322"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/categories?post=977322"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/telecomlive.in\/web\/wp-json\/wp\/v2\/tags?post=977322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}