Bharti Airtel yesterday posted loss of Rs 652 crore, before exceptional items, for its India business for the January-March quarter of last fiscal, 2017-18.
Bharti Airtel, which sustained Rs 652 crore loss in its India business during the March quarter, today blamed Trai’s reduction in call termination charges and ongoing tariff war for its financial performance. “Consolidated revenue for the quarter dropped 10.5 per cent due to decline in India mobile revenue and Airtel business,” Bharti Airtel Chief Financial Officer Nilanjan Roy said during earnings call today. “This was largely led by cut in domestic and international termination charges besides continuous pressure on ARPU on mobile front,” he said. Bharti Airtel yesterday posted loss of Rs 652 crore, before exceptional items, for its India business for the January-March quarter of last fiscal, 2017-18.
Airtel reported average revenue per user (ARPU) of Rs 116 for the quarter, down by 26.7 per cent from Rs 158 it had registered a year ago. The Telecom Regulatory Authority of India (Trai) reduced domestic mobile termination charge (MTC) from 14 paise per minute to 6 paise per minute from October 1, 2017 and the international MTC rate was reduced from 53 per minute to 30 paise per minute effective February 1, 2018. The country’s largest mobile operator Bharti Airtel reported its lowest quarterly consolidated net profit in at least 14 years, as competition with free voice calls and dirt-cheap data tariffs from new entrant Reliance Jio ate into its margins.
Airtel posted a consolidated net profit of Rs 82.9 crore (or 21 paisa per share) in January-March quarter of 2017-18 fiscal as compared to Rs 373.4 crore (or 93 paisa a share) in the same period of the previous fiscal. Airtel’s total revenue fell by 10.5 per cent to Rs 19,634 crore in the fourth quarter of 2017-18, according to an Airtel earnings statement. For the full fiscal year that ended in March 2018, Airtel’s net profit came in at Rs 1,099 crore, over 71 per cent lower than Rs 3,800 crore logged in FY 2016-17. The company, however, narrowed its standalone loss during the reported quarter to Rs 757.2 crore from Rs 14,173 crore it posted in the same period a year ago.
Gopal Vittal, MD and CEO for India South Asia at Bharti Airtel said that current level of average revenue per user is not sustainable and important matrix to measure company’s performance is to see if it is getting more customers and mainly data customers. “There are headwinds…ARPU has eroded. The worst is behind us in terms of revenue erosion. That said, competitive intensity continues to be strong,” Vittal said. Roy announced that the company plans to spend Rs 27,000-28,000 crore to expand and improve networks and attract more customers. In financial year 2017-18, the company invested around Rs 24,000 crore.
Africa business of Bharti Airtel brought some relief to the company’s overall business during the reported quarter. After accounting for the finance costs and taxes, the net income of Africa business for the quarter was USD 108 million as compared to USD 4 million in the corresponding quarter last year. Airtel’s Africa revenue grew 10.7 per cent to USD 791 million over the same period of previous year, fuelled by “strong growth in data and Airtel money transaction value”.