Bharti Airtel experienced continued weakness in its fiscal Q3, with a government reduction in the mobile-to-mobile interconnect usage charge adding downwards pressure on already falling ARPU in its largest market India.
The operator’s net profit for the quarter (ended 31 December 2017) fell 39.3 per cent year-on-year to INR3.06 billion ($48 million), with revenue dropping 12.9 per cent to INR203 billion. The profit decline marks the seventh consecutive quarterly fall.
Consolidated mobile data traffic surged 460 per cent year-on-year in the quarter as its overall user base rose 8.1 per cent.
A continuing data price war in India weighed on its performance in its home market, as revenue declined 15.1 per cent year-on-year to INR152.9 billion. Mobile service turnover decreased 22.2 per cent to INR107.5 billion, with ARPU dropping 28.6 per cent to INR123.
Gopal Vittal, Airtel’s MD and CEO of India and South Asia, said a mobile termination rate reduction at the beginning of October 2017 “exacerbated the industry ARPU decline”, noting the government’s plan to cut the international termination charge will “further accentuate this decline and benefit foreign operators with no commensurate benefit to customers”.
Vittal said data traffic rose 544 per cent year-on-year. The operator added 8.1 million subscribers to end 2017 with 290 million.
Capex rose 11 per cent to INR59.6 billion in the quarter as it added 88,000 base stations across India to take the total to 259,000.
Airtel is India’s largest mobile operator with a 24 per cent market share.
Revenue for its Africa business grew 5.1 per cent year-on-year to $783 million, with subscribers in the region increasing 4.7 per cent to 84.1 million. EBITDA jumped 51 per cent to $278 million.
Data customers rose 39.4 per cent to 23.3 million, with data users representing 27.7 per cent of its user base (up from 21.8 per cent in the same period of 2016). Data usage per customer during the quarter increased 48.7 per cent year-on-year.
Raghunath Mandava, MD and CEO of Airtel Africa, said Airtel Money transactions rose 35.5 per cent to 472 million in fiscal Q3, while the total number of Airtel Money uers increased 21.7 per cent year-on-year to 10.4 million.
The company installed 190 network towers during the quarter to take its total to 19,054 at the end of 2017. It has rolled out 4G across four of the 14 countries where it operates.