Bharti Airtel on Wednesday reported a 41 per cent decline in its net profit to Rs 1,303 crore for the third quarter ended December 31, 2010 compared with Rs 2,195 crore in the corresponding period last year.
The company said that the decline in profits was due to a combination of adverse foreign exchange fluctuation, high spectrum cost and brand re-launch cost.
Adverse currency movements in Africa and India resulted losses of Rs 151 crore compared to gains of Rs 152 crore during the third quarter last year. The income before tax dropped on account of increase in spectrum charges costing Rs 80 crore and increase in net interest outgo at Rs 471 crore. That apart there was also a one-time brand re-launch cost of Rs 340 crore and restatement losses of Rs 303 crore.
The consolidated net revenues increased 53 per cent from Rs 10,305 crore last year to Rs 15,756 crore in the third quarter FY' 11. Airtel's subscriber base increases 66 per cent to 207 million from 125 million in the corresponding quarter last year. The company had 199 million subscribers in the mobile segment at the end of December 2010.
In the mobile segment, the average revenue per user (ARPU) declined 14 per cent to Rs 198 a month compared with December 2009. This is the first time the ARPU level for Airtel has fallen below the Rs 200-mark. The average revenue per minute has also declined by 15 per cent to 44.2 paise.
At the same time, the Minutes of Usage per User have increased only marginally by one percent to 449 minutes. Monthly churn has increased from 6.3 per cent in December 2009 to 7.8 per cent in December 2010, which means there are more number of subscribers leaving Airtel network. This is expected to increase now with the introduction of mobile number portability.
The good news is that non-voice revenue has increased from 11 per cent of the overall revenue to 13.8 per cent. With the introduction of 3G mobile services, uptake of data will increase.
Bharti Airtel's share price was up 2.75 per cent to Rs 323 on the Bombay Stock Exchange at close on Wednesday.
tkt@thehindu.co.in