Bharti Airtel upgraded to BBB+ amid data-led growth

What S&P changed and why it matters

S&P Global Ratings has upgraded Bharti Airtel’s long-term issuer credit rating to BBB+ from BBB, pointing to stronger earnings prospects in India and Africa and an improving balance sheet. The rating agency linked the upgrade to surging mobile data consumption, which is lifting cash flow and strengthening Airtel’s ability to reduce debt. S&P also maintained a stable outlook, indicating it expects the company’s balance sheet strength to improve further over the next 12 to 24 months as earnings and cash flows expand.

Credit ratings matter for large telecom operators because they influence funding costs and access to global debt markets. In S&P’s view, Airtel’s markets are seeing more customers streaming, browsing, and migrating to larger data packs, which supports steadier operating cash flow. The agency also highlighted a “fundamental improvement” in the telecom environments of India and Africa.

Data usage trends driving the ratings case

S&P’s rationale rests on how quickly consumers are increasing data usage and shifting to higher-paying plans. It expects Airtel’s India business to benefit from higher consumer spending on telecom services, subscriber additions, premiumisation, and churn from other operators. This, in S&P’s assessment, should support earnings growth and continued deleveraging.

The agency’s commentary also ties the rating upgrade to industry structure. S&P said India’s telecom sector is stabilising into a three-player market that is increasingly focused on improving returns. In that context, Bharti Airtel is positioned as the close second player, according to the agency.

India outlook: subscriber additions and ARPU growth

For India, S&P expects Airtel’s subscriber base to grow by 3%-4% over the next year. It also projects ARPU growth of 5%-7%, attributing it to higher data usage, premiumisation, and subscriber additions. Elsewhere in the provided disclosures, S&P also cited expectations of 2%-4% annual subscriber growth and 6%-8% ARPU growth over the next couple of years, supported by upgrades to higher-priced plans and higher data consumption.

Airtel’s recent reported ARPU numbers were also referenced in the material. The company’s ARPU reached ₹257 in Q4 FY26, up from ₹245 in the same quarter a year earlier. Separately, S&P cited ARPU at ₹256 in Q2 FY26, and noted that tariff hikes in July 2024 supported a meaningful lift in ARPU. During that hike, mobile tariffs were raised by 10%-21%.

Africa outlook: faster growth than India in base case

S&P expects Airtel’s African operations to outperform its India business over the next 12 to 24 months, based on operating performance that the agency said is stronger than expected. Under its base case, S&P projects the African customer base will grow 9%-11% annually and ARPU in US dollar terms will rise 5%-7% annually through the fiscal year ending March 31, 2028.

The agency also said the “recalibration” of Africa’s earnings reflects the relative strength of local currencies, adding that the Indian rupee has depreciated by 5%-7% versus the US dollar in the past six months. While that remark is currency-related, the key takeaway in the rating note is that Africa’s growth trajectory is expected to remain strong and increasingly important to Airtel’s consolidated earnings.

EBITDA and mix shift: Africa’s rising share

S&P forecast Airtel’s consolidated EBITDA will increase by 8%-10% annually over the subsequent two years, after a 28% increase in fiscal 2026. The agency expects Africa’s contribution to consolidated EBITDA to rise to 25%-27%, up from previous estimates of about 20%. In other parts of the provided material, S&P also described Africa’s earnings contribution as remaining around 20% through fiscal 2027, indicating that the agency’s expectations have evolved as Africa’s performance exceeded earlier assumptions.

This mix shift is central to the BBB+ upgrade because it signals more diversified earnings and a potentially more resilient cash flow profile, in S&P’s assessment.

Key figures at a glance

Financial and operating datapoints cited in disclosures

Beyond projections, the provided material cited several reported operating and financial datapoints. As of September 2025, Bharti Airtel reported 364 million wireless subscribers, up from 351 million a year earlier.

Revenue performance was also referenced for the September quarter. Bharti Airtel reported revenue of ₹52,145 crore, up 25.7% from a year ago and 5.4% from the preceding quarter’s ₹49,463 crore. The revenue growth was described as being driven largely by its mobile services business, with a focus on premium services and growth in Airtel Africa.

Separately, the material noted that as of March 31, 2026, Airtel’s mobile revenue in India rose 8.3% year-on-year, driven by improved realisations and a growing customer base.

Market impact: what the upgrade signals for investors

The S&P upgrade puts Airtel’s balance sheet trajectory and operating momentum in focus, particularly the link between data-driven ARPU expansion and cash flow stability. The rating agency’s stable outlook also signals that it expects leverage and cash flow to keep improving over the next 12-24 months, supported by rational competition.

For equity investors tracking the telecom sector, the numbers in S&P’s note frame near-term monitoring points: subscriber additions in India, the pace of ARPU expansion after the July 2024 tariff resets, and the degree to which Africa continues to outgrow India and lift its share of consolidated EBITDA to 25%-27%.

Analysis: why S&P sees a structurally better setup

S&P’s note repeatedly ties Airtel’s outlook to structural changes rather than one-off benefits. In India, the shift toward a three-player market and higher returns provides a clearer runway for ARPU improvement, particularly as users consume more data and migrate to higher-priced plans. In Africa, S&P’s base case assumes multi-year customer growth and rising dollar ARPU through fiscal 2028, which supports an increasing contribution to group EBITDA.

The combination matters because telecom balance sheets are sensitive to capital intensity and spectrum-related funding needs. A predictable earnings profile and consistent cash generation, as S&P describes, can improve financial flexibility and support deleveraging.

What to watch next

S&P’s upgrade to BBB+ was anchored in expectations of sustained operating improvements across India and Africa, alongside balance sheet discipline. Investors will watch whether Airtel delivers on S&P’s core assumptions: 3%-4% India subscriber growth and 5%-7% India ARPU expansion over the next year, continued 9%-11% customer growth in Africa with 5%-7% USD ARPU growth through fiscal 2028, and consolidated EBITDA growth of 8%-10% annually over the next two years.

Further rating actions, if any, will likely hinge on how closely Airtel’s reported cash flows and leverage trends track the agency’s stable-outlook expectations over the next 12-24 months.