Bharti Airtel Mobile 4G Data Customer Base Jumped to 65.7 Million in Q2 FY19

Bharti Airtel reported a drop in consolidated net profit for the tenth straight quarter as losses on mainstay India business widened due to pricing pressure from aggressive competition. Overall, the consolidated net profit of Rs 118.8 crore in July-September represented a drop of about 65% from Rs 343 crore in the year ago period, according to a company statement. The loss from India operations (before exceptional items) mounted to Rs 1646.4 crore in the second quarter of the current fiscal compared to about Rs 940 crore in the preceding three-month period.

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The company had clocked a net income of Rs 649.4 crore in the July-September quarter of 2017. A bruising price war sparked by the entry of richest Indian Mukesh Ambani’s Reliance Jio into the telecom sector with free voice calls and SMS bundled with cheap data has led to pressure on margins of incumbents which have scrambled to match competition.

The price war has already led to the merger of Idea Cellular Ltd and Vodafone Plc. Prior to the announcement of the second quarter earnings on Thursday, Bharti Airtel Chairman Sunil Bharti Mittal said the consolidation had come with a “significant pain” of nearly USD 50 billion of investment being written off and jobs being axed.

Bharti Airtel’s consolidated revenues dipped about 6% to Rs 20,422 crore for the just-ended quarter. The company said the exceptional gain during the quarter stood at Rs 1.013.7 crore (net of tax) “largely on account of the creation of deferred tax asset in DTH partially offset by charge towards network refarming/ up-gradation program during the quarter”.

Gopal Vittal, MD and CEO (India & South Asia), Bharti Airtel, said the average revenue per user (ARPU) decline has “moderated” this quarter driven by the focus on quality customers through simplified pricing and content partnerships. “We remain focused on driving quality base growth with value adding propositions for our customers. We also remain committed to investing in enhanced capacities and have deployed 27000+ broadband sites during the quarter, enabling a 239% YoY growth in mobile data volumes,” Vittal added.

The total revenues from India-South Asia operations at Rs 15,022.3 crore in July-September was lower than Rs 16,826.5 crore in the same period a year ago. The revenue from Africa business, however, rose to Rs 5,647.2 crore during September quarter from Rs 5,203 crore in the same period of the previous year.

In a statement announcing the Q2 earnings, Airtel said the consolidated mobile data and voice traffic grew 225% and 55% respectively year-on-year. Overall, the customer base stood at 445 million across 16 countries, up 15% year-on-year excluding divested units. Airtel also stated that mobile data traffic has grown more than 3X to 2,660 Billion MB in Q2 from 784 Billion MD in Q2 FY18. Likewise, mobile voice traffic has grown by 59% from 437 Billion minutes in Q2 FY18 to 693 Billion in Q2 FY19.

“India revenues for Q2’19 at Rs 14,920 crore have declined by 3.6% year-on-year (declined 10.9% on a reported basis) on an underlying basis. Mobile revenues have witnessed year on year de-growth of 7.2% on an underlying basis led by continued average revenue per user down-trading impacted by competitive pricing pressures,” the statement said.

The company said other businesses for India continue to experience healthy growth. Airtel said mobile 4G data customers jumped 132% to 65.7 million from 28.3 million in the corresponding quarter of the last year. “In constant currency terms, Africa revenues grew by 10.8% year on year led by strong growth in data and Airtel money transaction value,” the statement added.

Consolidated EBITDA at Rs 6,343 crore represented a drop of 20.7% over the year ago period. Earnings before interest, tax, depreciation and amortisation or EBITDA reflects a company’s operating performance.

The consolidated EBITDA margin fell to 31.1% in September 2018 quarter from 36.8%. Its consolidated net debt for the company increased to Rs 1,13,204 crore as compared to Rs 1,029,02.8 crore for the previous quarter. The company’s board has declared an interim dividend of Rs 2.50 per equity share of Rs 5 each for the financial year 2018-19, Airtel said in a regulatory filing.

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22 Comments on "Bharti Airtel Mobile 4G Data Customer Base Jumped to 65.7 Million in Q2 FY19"

 

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Chetan | Bangalore
October 27, 2018 7:11 am 7:11 AM

@tarun/chakri, can you please post yesterday interview of Gopal Vitthal where he talks about phasing out 3G and 2G 900 MHz Spectrum and refarming it to 4G. He also mentioned about minimum recharge being introduced to weed out marginal paying subscribers and wants only high ARPU subscriber on its network . People will get proper picture of what is happing. You have not posted my comment about same

Nikhil Mumbai-Pune
October 26, 2018 11:35 pm 11:35 PM

Airtel must expand their coverage with the help of band 40 and band 1 in next six months. Its high time they need to double their active customers. I don’t see Airtel getting choked even 12 crore people start using 558 plan. Airtel should start deploying band 40 as fast as possible.

Issaq
October 26, 2018 9:19 pm 9:19 PM

Worst network and contact centre gives all wrong information please avoid Airtel it is a Chor company

Nitin
October 26, 2018 11:48 pm 11:48 PM
A very interesting and cunning strategy AVOID are now deploying, by removing all tariff cutter plans and forcing people to spend minimum 35 RS a month. Call rate will be 2.5 paise, which is a bluff as it’s coming to nearly 3 paise per second, if taxes are also included. This leads to a mere 17 mins in RS 35 pack. The real essessnce of prepaid and pay as u go is lost, if 3 paise is going to be the call rate. Now if I want 2 spend 35 and get such a pathetic call rate, it makes a… Read more »
Chetan | Bangalore
October 27, 2018 7:16 am 7:16 AM

@nitin, this has been publicly stated by Gopal in yesterday interview and TT should post the interview for better understanding of readers. Airtel is leading this game and VIL will follow the steps soon.

Nikhil Mumbai-Pune
October 27, 2018 2:00 pm 2:00 PM

But this strategy won’t work for Airtel in my honest opinion. Let’s see what happens.

Diana
October 28, 2018 10:06 am 10:06 AM

This strategy won’t work and they will close down bts to cut expenses

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