Bharti Airtel beats estimate, profit up 300% in Q2 on one-time spectrum sale gain & tariff increases

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November 03, 2021 3:45 AM

Arpu increases further at Rs 153 on the back of tariff hikes

Apart from Arpu, the company's data usage per customer and voice minutes per user also continues to be ahead of rival Reliance Jio.Apart from Arpu, the company's data usage per customer and voice minutes per user also continues to be ahead of rival Reliance Jio.

The country’s second-largest telecom operator, Bharti Airtel on Tuesday beat Street estimates on all the fronts on the back of one-time spectrum sale gain and tariff increases undertaken by the company in August. The company’s consolidated net profit jumped 300% quarter-on-quarter to Rs 1,134 crore aided by a one-time gain of Rs 722 crore on account of spectrum sale to Reliance Jio. Net profit before the one-time gain was Rs 594 crore.

The company’s consolidated revenues on a sequential basis was up 6% at Rs 28,326 crore. Bharti’s consolidated Ebitda at Rs 14,018 crore was up 6.2% compared to the preceding quarter. Ebitda margin expanded to 49.5% against 49% in the preceding quarter.

The company’s India revenues were also up 5.64% sequentially at Rs 19,890 crore while mobile revenues were up 6.19% quarter-on-quarter at Rs 15,191 crore.

The average revenue per user (Arpu) was in line with estimates at Rs 153 compared to Rs 146 in the preceding quarter. The company’s Arpu continues to be the best in the industry remaining ahead of Reliance Jio’s Rs 143. In August, the company had hiked post-paid tariffs for corporate customers and entry-level plans for pre-paid users, the gains of which came in during the quarter.

Apart from Arpu, the company’s data usage per customer and voice minutes per user also continues to be ahead of rival Reliance Jio.

Minutes of voice usage per customer per month increased 1% quarter-on-quarter to 1053 minutes. Data usage per customer per month was also up 1% sequentially at 19,066 MB, which continues to be the strongest in the industry. Total data volume saw a jump of 4.6% q-o-q at 11,270,769 million Mbs.

Monthly churn saw a slight increase to 3% compared to 2.8% in the preceding quarter. This was expected due to tariff hikes in the entry level packages.

Of the company’s total 323 million subscribers, now 193 million are 4G users. The 4G subscriber addition saw a 4.4% jump on a sequential basis. During the quarter, the company added 8.1 million 4G users, who now comprises 60% of the overall customer base of the company.

“We welcome the reforms announced by the government for the telecom industry and believe this will add to the ability of the industry to invest so as to drive India’s digital story. We hope the reforms momentum will continue and all longstanding issues impacting the industry will be addressed,” Gopal Vittal, MD and CEO, India and South Asia, said. “We continue to maintain high degree of financial flexibility. As a result, we have now achieved nil bank debt for our India businesses. We will continue to evaluate all options to maintain comfortable leverage profile and manage associated costs,” Vittal added.

Regarding the quarter gone by, Vittal said the strategy of focusing on quality customers has been validated by the strong price flow and Arpu increase in the wireless business.

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