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For the first time in four years, Bharti Airtel has reported growth in profits riding on higher voice call tariffs and surging usage for its data services.
The country’s top operator reported 115 per cent increase in net profit to ₹610 crore during the third quarter ended December 2013 compared to ₹284 crore in the corresponding period last year.
The consolidated revenues for the quarter stood at ₹21,939 crore which is 13.3 per cent higher than the corresponding quarter last year. Consolidated mobile Internet revenues at ₹1,736 crore grew by 105.2 per cent, accounting for more than one-third of the overall incremental revenue. The company’s share price was down 1.52 per cent at Rs 301.65 at close on BSE on Wednesday.
Mobile voice realisation in India improved by 1.96 paise to 37.13 paise and minutes of usage grew by 5.9 per cent. Data customer base increased by 31.2 per cent to 54.4 million customers leading to 97 per cent increase in total data traffic.
Mobile ARPU Mobile Average Revenue Per User has increased by ₹9.7 to ₹195. International revenues also grew by 18.5 per cent in rupee terms with Africa growing by 17.2 per cent and South Asia by 44.8 per cent.
Gopal Vittal, Joint Managing Director and CEO, India Operations, Bharti Airtel, said,
“Our efforts over the last 12 months to improve the quality of customer acquisitions have resulted in significant reduction in customer churn. Our focus on superior Internet experience has resulted in increased data adoption and usage. Data is now a huge source of revenue growth.”
Airtel has gained from the decreased intensity of competition, allowing it to start raising voice calling rates.
But as a result the minutes of usage (MOU) has slowed down on quarter-to-quarter basis. “Overall, the key surprise from the results was better than expected India cellular margins and Africa business revenue growth. However similar to Idea Cellular, MOU growth was slow – implying changing industry dynamics of slowing MOU due to free minutes being curtailed,’ said Ankita Somani, Research Analyst – Telecom, Angel Broking.
Key challenges Going forward, Airtel has some serious challenge including the impending launch of broadband services by Reliance Jio Infocomm.
Airtel must also bid to purchase new spectrum in an auction of mobile airwaves starting February 3 to keep providing services in key markets including Delhi and Mumbai.
Aggressive bidding by Reliance Jio could put pressure on Bharti Airtel to raise more debt.
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