India’s second-largest telecom operator Bharti Airtel missed second-quarter profit estimates on Thursday as higher network operating costs offset gains from subscriber additions and upgrades to costlier plans.

The ‌company’s consolidated net profit rose to 88.88 billion rupees ($940.45 million) for the quarter ended September 30, from 67.92 billion rupees a year ago, a Reuters report said yesterday.

Analysts, on average, expected a profit of 96.73 billion rupees, according to LSEG-compiled data.

An 11 percent rise in network costs, which cover the operation and maintenance of telecom infrastructure, ⁠and a 13 percent increase in licence fees pushed total expenses up about 15 percent to 259.32 billion rupees during the quarter.

However, Airtel’s industry-leading average revenue per user (ARPU) — a key telecom metric — rose 6 percent year-on-year to 271 rupees during the second-quarter, helped by a 18.8 million increase in its 4G and 5G user base.

With no broad-based tariff hikes since July 2024, Airtel has relied on premiumisation to lift ARPU, discontinuing several cheaper prepaid plans ‌during ⁠the quarter in a move analysts expect will steer users towards costlier recharges.

India’s telecom sector has witnessed intense competition since Jio’s entry in 2016, ⁠with the Reliance unit overtaking peers to command the country’s largest user base.

Airtel’s India user base grew 10.9 percent year-on-year to over 498.7 million as of Sept. 30, ⁠lagging behind Jio’s 542.4 million.

Revenue from Airtel’s Africa business, which operates in 14 countries across sub-Saharan Africa and accounts for about a quarter ⁠of group revenue, rose 37.6 percent.

Overall revenue rose 16.7 percent to 608.78 billion rupees, above analysts’ expectation of 604 billion rupees.