It is the eleventh consecutive decline as the competition in the telecom sector continues unabated
Bharti Airtel on Thursday posted a 72% plunge in its net profit at Rs 86.2 crore for the quarter ended December 31. It is the eleventh consecutive decline as the competition in the telecom sector continues unabated.
In the corresponding quarter of the previous financial year, it had posted a net profit of Rs 305.8 crore.
Forecasts had suggested a net loss for the third quarter (Q3), but a one-time gain of Rs 1,017 crore (net of tax) on account of deconsolidation of Airtel Payments Bank Ltd, helped the company post a profit. Analysts had estimated a loss of Rs 686 crore, according to Refinitiv Eikon data quoted by Reuters.
Consolidated revenues during the October-December quarter grew just 1% to Rs 20,519 crore from Rs 20,318.6 crore a year ago. On an underlying basis, the revenues went up by 1.9%. However, India revenues declined by 2.3% on an underlying basis to Rs 14,768 crore because of sustained pricing pressure in the mobile segment.
The company announced minimum Arpu (average revenue per user) packs of Rs 35 for its prepaid users during the quarter, which necessitates monthly recharges for subscribers. This led to a churn of about 6 million. The total user base declined to 284.2 million in Q3 FY2019 from 290.1 million in the year-ago period. The company said, effective December last year, it has modified the prepaid customer base definition in order to represent only the customers who transact and generate revenue.
Gopal Vittal, MD and CEO, India and South Asia, said, "Our simplified product portfolio and premium content partnerships have played out well during the quarter, translating into one of our highest-ever 4G customer additions of over 11 million."
"Our mobile data volume continues to expand, with year-on-year growth of 190%. We have deployed 24,000 broadband sites during the quarter and remain committed to investing in capacities ahead of the demand curve and providing a superior customer experience," he said in a statement.
The 4G customer base in India stood at 77.1 million at the end of the quarter. The traffic on the network grew by 42.1% to 703 billion minutes year on year from 494.5 billion.
The total MBs on the network have increased by 190.9% to 3,217 billion MBs as compared to 1,106 billion MBs in the same quarter last year. Mobile data usage per customer rose by 96.8% to 10,528 MBs during the quarter as compared to 5,349 MBs in the year-ago quarter.
Despite a rise in data usage and minutes, Arpu continued to decline. It stood at Rs 104 during the third quarter against Rs 123 in the same quarter last year. However, sequentially, there was an increase in the Arpu after nine quarters of consecutive decline. It was Rs 100 in the second quarter of this fiscal.
Consolidated net debt decreased by Rs 6,836.8 crore to Rs 1,06,367.4 crore.
The telecom industry is still reeling under the tariff war triggered after the entry of Reliance Jio. After the resulting consolidation, only three private players are left - Airtel, Vodafone Idea (after the merger) and Reliance Jio.
Airtel's Digital TV business witnessed a growth of 7.1% in revenues.
Revenues for Africa grew by 11.2% on-year in constant currency terms, led by strong growth in data and Airtel money transaction value. Mobile data traffic grew 61% to 105 billion MBs from 66 billion MBs a year ago. Data customers increased by 25.5% to 29.3 million from 23.3 million while Active Airtel Money customer base increased to 13.8 million, boosting the total transaction value on Airtel Money platform by 29% to $6.9 billion.
On Wednesday, the company had announced that Qatar Investment Authority (QIA) will invest $200 million in Airtel Africa through primary equity issuance. The transaction was completed on Thursday.
The amount will be used to pare debt of the company, which stands at around $3.5 billion. Airtel Africa also intends to come up with an initial public offering and use the proceeds primarily for further reduction of debt.
IN NICK OF TIME
- Rs 86.2 crore – Net profit during Q3
- Rs 686 cr – Loss analysts had predicted
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