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Bharti Airtel has managed to increase subscriber additions as well as improve ARPUs (average revenue per user) in the March quarter. That it has been able to add quality customers (those that recharge regularly) has been an added highlight.
During the quarter, while revenues grew 15 per cent over the same period in the previous fiscal to Rs 18,729.4 crore, net profits fell 28.2 per cent to Rs 1,005.9 crore. Higher outflows due to taxes, increased interest costs and forex fluctuation losses led to fall in net profits. The company witnessed a 13.7 per cent growth in operating profits to Rs 6.232.9 crore though.
While Bharti's mobile services division grew, other segments such as its tower business (Bharti Infratel) and telemedia (landline and broadband) had a stagnated on a sequential basis.
The DTH division though continues to improve its ARPUs steadily.
The company improved its ARPU for the second quarter in succession to Rs 189. Also, Bharti has once again started increasing the rate of subscriber additions with over 5.6 million customers added during the three months to March, compared to only 2.8 million and 3.6 million added in the previous two quarters.
Despite this increase, the company has managed to grow the proportion of regular users to 91.9 per cent of the overall base. Bharti has thus managed the twin objectives of enhancing subscriber base while keeping an eye on quality of those added.
But the rate per minute slipped after steadily increasing for the past three quarters as minutes of usage increased. This is similar to what its peer Idea Cellular experienced. The increased usage leaves the room open for monetization in the future.
Mixed performance
Bharti Infratel had marginal decline in revenues to Rs 2,418.3 crore, though the operating margin (38.6 per cent) continues to rise steadily as does the sharing factor, at 1.89.
The telemedia business experienced a sharp reduction in subscriber base. This though may have been a conscious strategy, to improve ARPUs. There is likely to be increasing competitive intensity in the broadband segment, especially in the wireless space as the likes of Reliance commence operations.
The DTH segment continues to grow strongly with addition of 1.59 lakh customers in the quarter. The ARPU in this segment continues to rise and is at Rs 166, among the highest in the industry.
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