The impact of Reliance Jio’s free offer was clearly seen on Bharti Airtel’s third quarter results, wherein it reported a 55 per cent drop in its net profit year-on-year (Y-o-Y) to ₹504 crore.
The company’s net profit during October-December 2015 was much higher at ₹1,108 crore. “The quarter has seen turbulence due to the continued predatory pricing by a new operator. The present termination costs at 14 paise, which are well below cost has resulted in a tsunami of minutes terminating into our network,” said Gopal Vittal, Managing Director and Chief Executive Officer (India and South Asia).
This has led to an unprecedented year-on-year revenue decline for the industry, pressure on margins and a serious impact on the financial health of the sector, he said. Mobile data revenue at ₹3,087 crore dipped 3 per cent annually. However, mobile broadband customers increased 22 per cent to 37.7 million, from 30.9 million in the corresponding quarter previous year, Airtel said.
Total income from operations of the company also declined three per cent year-on-year during the period to ₹23,336 crore against ₹24,066 crore in October-December 2015. In Africa, Airtel saw impact of devaluation of Nigerian currency on Y-o-Y basis.
Consolidated net debt of Airtel increased 24 per cent to about ₹97,395 crore at the end of December 31, from about ₹78,451 crore in the corresponding period a year ago.
Net interest costs rose from ₹1,360 crore in the corresponding quarter last year, to ₹1,810 crore, largely due to increased spectrum-related interest costs, the company said.
Forex and derivative losses came in at ₹126 crore, compared to ₹57 crore in the corresponding quarter, it said. However, Airtel’s India revenues were up by around 2 per cent and that of Africa by 6 per cent on year-on-year basis.
“At the same time, our commitment to provide a superior experience to our customers has led to revenue market share crossing a lifetime high of 33 per cent,” Vittal added.
Mobile data revenue now contributes 23 per cent of Mobile India revenues vis-à-vis 23.1 per cent last year, the company said.
Subscriber base As of December 31, the company had 2,65,853 mobile subscribers in India as compared to 2,43,289 customers in December 2015.
The company said it continued to invest on up-gradation and expansion of network towers and by the end of the quarter, it had 1,60,199 towers as compared to 1,51,200 towers in the same quarter in 2015.