Airtel hit by “pricing disruption” after Q1 Jio battle – Mobile World Live

Airtel hit by “pricing disruption” after Q1 Jio battle

25 JUL 2017

Bharti Airtel reported a 14 per cent decline in revenue and a significant slump in profit, as India’s market leader continued to feel the force of Reliance Jio’s entry into the market.

In the company’s fiscal Q1 2017 announcement, Gopal Vittal, MD and CEO, India and South Asia, said that the “pricing disruption in the Indian telecoms market caused by the entry of a new operator continued”, with industry revenue declining 15 per cent year over year, and “creating further stress on sector profitability, cash flows and leverage”.

Since its entry last September, Reliance Jio has caused quite a stir.

The operator attracted more than 100 million subscribers in a matter of months after offering free voice and data services in a promotion, and forced established rivals Airtel, Vodafone India and Idea to drop prices.

Vodafone and Idea have since announced their intentions to merge, while Airtel struck a deal to acquire Telenor’s Indian operations and beef up its presence in six regions across the country.

However, Jio continues to have a telling impact, as Airtel posted its smallest profit in 18 quarters, reported Reuters.

The company’s net income for the period reached INR3.7 billion ($57 million), a 75 per cent drop from the same quarter last year, when it stood at INR14.6 billion.

Total revenue fell to INR219.6 billion, from INR255.5 billion, while revenue in its home market India dropped a total of 10 per cent, reaching INR172.4 billion.

Mobile revenue in India dropped a total of 14 per cent to reach INR129.1 billion, despite a 9.7 per cent growth in subscribers.

The company reported a total of 280.6 million customers in its home market, and 379.8 million across the group (including Africa and South Asia), representing 6.2 per cent growth year over year.

Showing the effects of intensifying price competition, mobile data traffic more than doubled during quarter, but consolidated revenue from data services decreased by 17 per cent, hitting INR37.7 billion. Mobile data represented 17.1 per cent of the group’s total revenue, compared to 18.2 per cent in fiscal Q1 2016.

Africa
Airtel’s Africa operations, where the company has networks in 15 countries, saw revenue growth of 1.5 per cent to reach $736 million, up from $732 million on a constant currency basis.

Data revenue for the region reached $138 million, up by 11.3 per cent year over year, and now contributes to 18.7 per cent of the region’s total revenue. Data traffic in the region also grew by 75 per cent.

The operator’s total mobile subscribers in Africa increased 4 per cent to 80 million, up from 77 million last year.

Airtel’s Africa MD and CEO Raghunath Mandava said the data story in Africa is “unfolding well”.

Author

Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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