The Hindu Business Line : Mobile segment drives strong revenue growth for Bharti Airtel

Bharti Airtel has delivered a good set of numbers this quarter. The revenues grew 10 per cent sequentially to Rs 6,963.9 crore driven by strong mobile subscriber additions – 6.3 million – this December quarter. The net profit grew by 6.7 per cent to Rs 1,722.4 cr sequentially.

Mobile Services

The mobile services revenues grew by 11 per cent – higher than overall growth – indicating that this segment is still the key revenue driver for the company. However, the decline in ARPU (average revenues per user) continues and stands at Rs 358 currently, while the minutes of usage have gone up to 474. This suggests a declining trend in realisations in the medium term, though volume growth might offset it in the long run.

The non-voice segments – SMS and VAS – have just about maintained their contribution to revenues; but these higher margin services will have to increase contributions for ARPUs to stabilise.

There are, however, positive developments in this segment. On Wednesday, Bharti has been allocated additional spectrum in five circles, which may boost subscriber additions. Recent tariff hikes and schemes such as one rupee for all local calls, when implemented countrywide, should help realisations. As Indus Towers’ operations expand, Bharti should see additional revenue flow and savings on tower operating expenditure.

Non-Mobile Businesses

While there is cause for cheer in the mobile segment, the same cannot be said of the non-mobile segment. The broadband and telephone division has registered a 4 per cent growth in revenue terms, but ARPU here has dipped one per cent sequentially to Rs 1,140. However, this segment may see a greater thrust as and when Bharti expands its IPTV services for which greater broadband activity is paramount. Bharti’s national and international long distance segment has grown 12.9 per cent this quarter.

With its strong nationwide network, this segment was expected to grow strongly. However, existing operators start to carry their traffic within and outside the country may pose a threat. On the other hand, if new entrants such as Unitech seek to lease the same, this may offer an opportunity for players such as Bharti. The Enterprise services catering to corporate sector has had an indifferent quarter with a dip of 3.9 per cent in revenues.