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Bharti Airtel's June quarter numbers may not have exactly cheered the markets, as profits came in below expected levels. However, key metrics such as average revenues per user (ARPU), realisation per minute (RPM) and minutes of use have all stabilised in both its domestic as well as African operations.
Significant expansion of margins in its tower segment as well as broadband and landline business (telemedia) could broad-base the company's effort to get into a high-growth trajectory.
During the quarter, Bharti's revenues rose 39 per cent over the same period last fiscal to Rs 1,6974.9 crore, while net profits dipped 28 per cent to Rs 1,215.2 crore as a result of increased operating expenses, higher tax outgo and interest costs.
But with peak capex out of its way and the African operations gathering steam, margins may reach a steady state going forward. Operating margins, at 33.6 percent, is still healthy and is among the highest in the industry.
Metrics stabilise
As with its large peers such as Vodafone and Idea Cellular, Bharti too reduced the pace of subscriber additions with less than 2.5 million subscribers per month added, as against the three million it used to garner in the earlier quarters. This may have been done to have a more lucrative base to drive its services.
Bharti's domestic and African mobile ARPUs, at Rs 190 and $7.3 respectively, have remained stable as have minutes of usage per user. RPM, at 42.8 paisa has remained at about the same levels it was previously.
The tower business (Bharti Infratel and 42 percent stake in Indus Towers) has seen a 12 per cent increase in revenues and a 220 basis points operating margin expansion over the previous year to 37.7 per cent. This has been due to increasing tenancy and sharing revenues.
The telemedia segment too has seen increases in revenues (6 per cent) as well as operating margins to 45.5 per cent currently.
These two businesses contribute nearly 19 per cent of its revenues and look poised to aid the overall growth.
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