Revenue per user of Bharti Airtel decreased by 32 per cent on year-on-year basis from Rs 154 to Rs 105 but the telco giant is confident to buck up
Amidst stiff competition from Reliance Jio’s cheaper tariffs and free voice calls, Bharti Airtel reported the company’s first-ever loss of Rs 940 crore from its India business in June, falling under the first quarter of the current financial year.
Net profit in first quarter stood at Rs 97 crore
Although the company saw loss in June, the net profit for Airtel in the first quarter of the current financial year (April to June) stood at Rs 97 crore. This amount included the telco major’s Africa business as well. The consolidated net profit in the quarter under discussion is 73 per cent lesser than Rs 367 crore in the same quarter in the previous fiscal year (2017-18). Airtel India business reported a net profit of Rs 834.9 crore in the first quarter of the previous fiscal year and the last quarter of the same fiscal year stood at Rs 186 crore. The consolidated earnings of Bharti Airtel went down by 8.6 per cent to Rs 20,080 crore for the first quarter of the current fiscal year versus Rs 21,958 crore in corresponding period of 2017-18.
Gopal Mittal, MD & CEO of Airtel (India and South Asia), said in a statement: “Industry pricing continues to remain untenable. However, led by our successful bundles, content partnerships, and handset upgrade programs, our mobile data traffic surged 355 percent on a year-on-year basis.”
Furthermore, the telecom company’s operational performance also saw a decline by 16 per cent hike in finance cost to Rs 212.65 crore and forex losses in the 2018-19 from Rs 182.74 crore in the previous fiscal year. This took the total debt of Airtel to Rs 1.03 lakh crore in the end of the first quarter of the current 2018-19 financial year. Also, the average revenue per customer on Bharti Airtel India business also decreased by approximately 32 per cent to Rs 105 from Rs 154 on a year-on-year (YoY) basis.
This news comes at a time when the Airtel is set to be dethroned from being the largest telecom company in India following the merger of Vodafone India and Idea Cellular, which received the final approval by the Department of Telecommunications (DoT) on Thursday.
Mobile subscribers increased by 28 per cent
Even after all the revenue losses, Airtel’s obtaining of Telenor’s India business, saw the telco giant increase its mobile subscribers’ by 28 percent to 344.6 million as on June 30, 2018 compared to 280.6 million in the corresponding quarter of the last financial year.
In India, the company included 8.7 million extra data customers on their network base versus the previous quarter thereby taking the total number of Internet users of Airtel to 94.8 million at the end of the first quarter.
“Aggressively expanding our 4G capacities and continuing to offer highest data speeds to customers remains a key priority for us, and towards this end, the first quarter of the financial year 2019 has seen our highest quarterly capex spends of Rs 7,887 crore,” Vittal said.
At the end of the quarter under discussion (first quarter of 2018-19), the telco major has reported 1,67,355 network towers in comparison to 1,62,380 towers in the same quarter of last financial year.
Airtel Africa business becomes the savior
The telecom company’s Africa operations that reported net earnings of Rs 393.9 crore boosted the consolidated net income of Airtel as its India and South Asia business flagged with a loss of Rs 982.5 crore. The Africa business contributed to an increase of 14 per cent of the company’s revenue YoY based on US dollar terms. Raghunath Mandava, MD & CEO of Airtel Africa, said: “”We have rolled out about 1,000 broadband towers during the quarter. We continue our focus on profitable growth through superior customer offerings and expanding our Airtel money base – which now transacts more than $24 billion on an annualised basis.”
Data traffic in Africa on Airtel’s network also increased by 75 per cent, Airtel Money throughput grew by 43 per cent and even voice minutes saw a surge of 44 per cent, on a YoY basis.
