Bharti Airtel’s December quarter numbers disappointed the markets, especially on the profits front as a result of sharp rise in finance costs and increased tax outflows.
But some of its key operational parameters such as average revenue per user (ARPU), revenues per minute(RPM), proportion of active subscriber base, either stabilised or improved.
Also, its tower business witnessed higher tenancy and increase in sharing revenues.
During the quarter, Bharti’s revenues grew by 9.5 per cent over the same period last year to Rs 20,239.5 crore, while net profits fell in excess of 72 per cent to Rs 284 crore.
A rise in finance costs of 61.8 per cent and a 19.5 per cent increase in tax outflows resulted in a steep fall in profits.
Key parameters
The company has indicated that the worst may be behind it, an observation which is somewhat supported by the improved operational performance in most of its divisions. After two successive quarters of fall, Bharti has managed an increase in its mobile ARPUs to Rs 185. RPM was largely stable at 42.5 paisa. Minutes of usage improved in a seasonally strong quarter.
As with its competitors such as Idea Cellular and RCom, Bharti witnessed decline in its subscriber base (by about 4 million users) as it churned out inactive and non-lucrative customers.
3G subscribers
The company’s 3G subscribers witnessed an up-tick though.
The proportion of active subscribers (those that recharge regularly) has increased significantly to 95 per cent, which suggests that the company continues to focus on maintaining a quality subscriber base.
In its African operations, Bharti has witnessed a decline in ARPUs as well as RPM, a trend that has been continuing for the past 3-4 quarters. This has dragged the overall performance of the company, especially with respect to profits.
In its tower business (Bharti Infratel), the company was able to increase the average sharing factor marginally to 1.82 and also the sharing revenues.
Bharti’s DTH division continued to deliver well as ARPUs have risen steadily over the past several quarters and is now at Rs 186, among the highest in the industry. The segment also witnessed robust subscriber additions.