The country’s largest telecom operator, Bharti Airtel, on Tuesday beat analysts’ estimates by posting a net profit of Rs 83 crore during the January-March quarter against expectation of a net loss of Rs 104 crore. The company had posted a net profit of Rs 306 crore in the preceding quarter, when it was hit hard by the 57% cut in the mobile termination rates for domestic calls effected by the Telecom Regulatory Authority of India (Trai). However, if only the India business is taken into account, Bharti posted a net loss of Rs 652 crore against a net profit of Rs 95 crore in the preceding quarter.
During the January-March period, Bharti was once again hit hard by Reliance Jio’s price cuts in January, the reduction of international termination rates effected by Trai from February, and downtrading of average revenue per user (Arpu) because of a rise in bundled voice and data offers which see high usage but low realisation. As a result, revenues during the quarter declined 3.4% on a sequential basis to Rs 19,634 crore, a tad below expectations. Ebitda at Rs 7,034 crore was down 7.3% compared to the preceding quarter but above estimates, while margin was 35.8% against 37.3% in the preceding quarter. The company said the impact of cut in international termination rate led to a drop in gross revenue by Rs 124 crore and Ebitda by Rs 86 crore.
Bharti Airtel’s managing director and CEO, India and South Asia, Gopal Vittal, blamed the trend of below-cost tariffs in the industry, a veiled criticism of rival Reliance Jio. “The telecom industry continues to witness below-cost, artificially suppressed pricing. Industry revenues were further adversely impacted this quarter due to the reduction in international termination rates,” he said in a statement.
Apart from the regulatory front, Bharti got hit by price cuts by Jio in January.
On key metrics, blended Arpu at Rs 116 was down 5.9% on a sequential basis though minutes of usage per customer for voice increased by 16.6% to 670 minutes. Total minutes on network also jumped 19.8% to 592,657 million on a sequential basis. This is because the firm now offers plans which does not charge for voice calls but only data and here too, the rates have come down steeply from a high of 50GB to below 10GB.
The results are visible with the total data volume rising 39.2% on a quarter-on-quarter basis to 1,539,746 million Mbs. Data usage per customer also jumped 23.1% to 6585 Mbs on a sequential basis. However, India mobile services revenue were down 3.3% sequentially at Rs 10,222 crore.