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Data grows fourfold for Airtel but revenues continue to fall

31 Octobre 2017

The country's largest telecom operator, Bharti Airtel, on Tuesday reported a 63 percent fall in net profit for the September quarter on year-on-year (YoY) basis.

In an indication of how Airtel tried to retain its customers from moving to Reliance Jio's network, mobile data usage per customer during the quarter rose 308% to 4.08 GB per month as compared to 1 GB during the year ago period. "Mobile data traffic has grown fourfold to 784 billion MBs in the quarter as compared to 178 billion MBs in the corresponding quarter past year", the statement said.

The company said its consolidated net debt has increased to Rs 91,480 crore from Rs 87,840 crore in the previous quarter.

Airtel's MD and CEO, India & South Asia Gopal Vittal said that the primary reason for the fall in revenue is the financial stress in the telecom sector.

Raghunath Mandava, MD and CEO, Africa, said, "Airtel Africa underlying revenues grew by 2.8% Y-o-Y with net revenues growing 6.3% on the back of increase in data penetration".

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The Company's services include Video Services, Internet Services, Voice Services, Commercial Services and Advertising Services. The company reported $0.19 earnings per share (EPS) for the quarter, missing the Zacks' consensus estimate of $0.96 by ($0.77).

"This will eventually force operator consolidation and exits as we have witnessed in the recent past". The mobile market continues to experience value erosion and financial stress led by competitive pressures.

Consolidated revenue declined almost 12% to Rs 21,777 crore from a year earlier as data and voice rates fell. Vittal said that Airtel will increase its focus on data services to get new customers.

The Sunil Mittal-led company, in a separate statement, confirmed that it has been approached by global investors for "a significant stake" in its mobile tower arm Bharti Infratel, which if accepted, will see the investors acquiring control of the subsidiary. Taking cue, Airtel stock prices have gained almost 30% in the last month, touching a high of Rs 519.95 on October 25.

"Lower Ebitda along with rising spectrum costs and continued investments in India have resulted in deterioration of Return on Capital Employed to 5.1% from 7.4% in the corresponding quarter previous year", the company said.

It came a month after Airtel declared that it was buying the local operations of Telenor to enhance its spectrum coverage as the Norwegian firm made a decision to exit the Indian market. Investments were stepped up in the quarter to improve both data coverage and capacity, Airtel said. EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 2.3 percent sequentially to Rs 8,003.7 crore and margin expanded by 120 basis points to 36.8 percent for the quarter.