Bharti Airtel is best placed to ride the data boom in India, which will contribute 50 per cent of its incremental mobile revenue over FY14-17.

According to a report by brokerage firm CLSA, there is regulatory clarity after the recent spectrum auction wins, and despite higher payments and capex, its hefty cashflow should enable balance sheet improvements.

India’s broadband penetration is only 2 per cent, while mobile is a vast 72 per cent (893 million subscribers) and rising. Bharti, the nation’s top mobile operator, is taking the lead in data ramp up and, with the largest network and highest spectrum, the agency said.

“…we expect its mobile-data subscribers to jump 2.4 times to 129 million by FY17. Mobile data ramp up along with an upturn in voice revenue per minute should drive a 5 per cent annual improvement in average revenue per user (ARPU),” it added.

Widest network According to CLSA, Bharti Airtel is the “best play” on this theme as it has the broadest data spectrum footprint, the widest network infrastructure and a strong incumbency advantage.

Data will contribute 50 per cent of incremental mobile revenue over FY14-17 (cumulative), boosting EBITDA to a 12 per cent per annum, it said, adding the company’s balance sheet is improving and sector consolidation will be an added opportunity. Just as the absence of last mile connectivity led to India skipping the fixed-line phase and moving to 893 million mobiles phones over the past decade, the market is now set to leapfrog from PC-based fixed-line Internet access and adopt mobile data.

Shares rise

Bharti Airtel shares rallied more than 3 per cent on Wednesday. It ended up 2.92 per cent at ₹324.75 on a strong BSE.