Bharti Airtel, which posted one of its worst quarterly earnings on Tuesday with its net profit declining 66% quarter-on-quarter basis on the back of free services launched by Reliance Jio Infocomm, expects the adverse impact to continue during the current quarter as well.
The company, which has already adopted the strategy of offering more data at the same price and even bundling it with free voice calls in some packages, was evasive whether it will further push such offerings by merely stating that “ideally it would not want to do so”.
The company’s global chief financial officer (CFO) Nilanjan Roy in an earnings call with analysts on Thursday without naming RJIO said that the free price plan by the new operator has led to an “unprecedented drop in the revenues for the first time since inception”.
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He added that the free pricing plan has impacted data revenues and voice realisation and is also impacting industry dynamics. “In the short to medium term, this will impact all the stakeholders including government levies and taxes,” he said.
Bharti Airtel managing director and CEO (India & South Asia) Gopal Vittal said: “The impact of demonetisation was only for a few weeks. In some of our businesses, like DTH, the recovery was reasonably quick… The bulk of the impact was due to predatory pricing. When the incoming calls to our networks was operating at 90-95%… This is not changing in January or February or March. So there is going to be some impact of that.”