Bharti Airtel reaps its data rewards but net income is a letdown - Mobile World Live

Bharti Airtel reaps its data rewards but net income is a letdown

29 JAN 2016

Bharti Airtel, India’s mobile market leader which has significant assets in Africa, reported a 3.7 per cent increase in third quarter revenue to INR240.66 billion ($3.55 billion), the reward for a 3G/4G investment strategy that is partly a defence against the arrival of Reliance Jio Infocomm.

Three quarters of total company revenue comes from India where Airtel saw revenue from data services leap 51 per cent year on year to INR31.8 billion in the three months to the end of December 2015. The customer base of data users in India grew by 30 per cent and data traffic by 73 per cent, both year on year.

“Our strong roll-out of 3G/4G sites has resulted in acceleration of data usage growth to 73.3 per cent along with data ARPU reaching INR200,” said Gopal Vittal, the operator’s MD and CEO for India & South Asia.

In addition to India, the company’s South Asia operations include Bangladesh and Sri Lanka.

Like its peers, Airtel was spurred into a network upgrade because of the threat represented by 4G newcomer Reliance Jio Infocomm, although this is temporarily diminished as the latter’s launch plans have slipped.

A rise in data revenue was a necessary compensation as voice is no longer such a powerful revenue generator. One statistic offered by the company is that during Q3 voice ARPU in India fell by 13 per cent, year on year.

Meanwhile, the company’s net income fell steeply by 22.2 per cent to INR11.17 billion in the third quarter compared to a year earlier. The company’s EBIT actually rose by 3 per cent but was undermined by a number of exceptional items. These included a charge towards the operating costs associated with network refarming and the operator’s upgrade programme, as well as restructuring costs relating to a number of countries.

About one quarter of total revenue comes from Airtel’s African business where revenue slipped by 8.45 per cent to INR62.5 billion. However, on a constant currency basis, the number looked prettier, with quarterly revenue up three per cent.

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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