Bharti Airtel Shrugs Off Jio Impact In Q2
Bharti Airtel’s net profit declined for the sixth straight quarter.
Bharti Airtel Ltd.’s revenue remained stable and operational performance improved as the pricing pressure eased after Reliance Jio Infocomm Ltd. started charging users since the start of this financial year.
Revenue fell marginally to Rs 21,780 crore in the September-ended quarter but matched the Bloomberg consensus estimate of Rs 21,754 crore. The growth was led by Bharti’s Africa business which saw revenue rise nearly 3 percent even as revenue for the India business fell 11 percent.
The Sunil Bharti Mittal-led company’s average revenue per user fell 5.7 percent to its lowest ever at Rs 145. Latest entrant Reliance Jio Infocomm Ltd.’s ARPU of Rs 156.4 is currently the highest in the industry.
The company also surpassed analyst estimates on the operational front. Earnings before interest, tax, depreciation, and amortisation rose 2 percent quarter-on-quarter to Rs 7,922 crore, while Ebitda margin rose to 36.4 percent from 35.3 percent in the previous quarter.
Profit Slumps On One-Time Loss
Net profit of India’s largest telecom operator fell for the sixth straight quarter by 6.5 percent to Rs 343 crore over the previous three months, it said in an exchange filing. The consensus estimate of analysts tracked by Bloomberg had pegged the net profit at Rs 351 crore. The bottom line included an exceptional loss of Rs 179 crore on
account of network upgrade spends.
Earlier in the quarter, the company claimed that it has suffered a loss of Rs 6,800 crore in the last five years due to low network interconnection charges set by TRAI. In September, the telecom regulator halved call connect charges and said it will abolish the charges by 2020.
The financial stress in the industry continues due to double-digit revenue decline and will be further accentuated by the reduction in IUC rates in the next quarter. This will eventually force operator consolidation and exits as we have witnessed in the recent past.Gopal Vittal, MD and CEO-India & South Asia, Bharti Airtel
Earlier this month, Airtel agreed to take over the struggling mobile services business of salt-to-software Tata Group as low tariffs and rising debt continue to drive consolidation. It will get 4 crore customers and assets of Tata Group’s mobile services business, in the “debt-free cash-free” merger, which will see Sunil Mittal-led company take control of operations and a small portion of Tata Teleservices Ltd.’s unpaid spectrum liabilities.
Among five incumbent private mobile operators, only Bharti Airtel added new subscribers in September while the rest lost more than 29 lakh customers, according to data released by industry body COAI.
