Airtel posted 78% drop in net profit, blames artificially suppressed pricing

India's largest telecom operator Bharti Airtel today posted about 77.79 percent drop in its consolidated net profit at Rs 82.90 crore for the quarter ending March 2018 due to the reduction in international termination rates.

The consolidated revenues for Q4'18 dropped by 10.5 percent to Rs 19,634 crore compared to Rs 21,935 crore in the corresponding period last financial year.

Gopal Vittal, MD and CEO, India & South Asia, said: "The telecom industry continues to witness below cost, artificially suppressed pricing. Industry revenues were further adversely impacted this quarter due to the reduction in International termination rates.

He said: "Our strategic investments in data capacities, innovative digital content through Airtel TV, customer friendly bundles and upgrade programs led to the highest ever mobile data customer additions of 15 million during the quarter. Usage parameters remained robust- on a YOY basis, we saw data and voice traffic grow 584 percent and 55 percent respectively.

India revenues for Q4'18 at Rs 14,796 crore have declined by 7.5 percent Y-o-Y (13.1 percent on reported) on an underlying basis. Y-o-Y de-growth primarily impacted by the mobile drop of 13.5 percent. India other business has witnessed healthy Y-o-Y growth e.g. 10.7 percent in Digital TV and 11.2 percent in Airtel Business on an underlying basis.

Meanwhile, Airtel said that mobile data traffic has grown more than 6x to 1,540 billion MBs in the quarter as compared to 225 Bn MBs in the corresponding quarter last year. Mobile broadband customers increased by 79.3 percent to 76.6 million from 42.7 million in the corresponding quarter last year.

"In line with our goal of building market-leading 4G networks, with best in class speeds and capacity; while supporting the Digital India initiative, we have ended the financial year with our highest ever capital expenditure of Rs 240 billion. We intend to continue the rollout momentum next year as well," Vittal added.

During the quarter, Bharti Airtel acquired Tigo Rwanda country operations in Africa. Financials and operational parameters of the combined entity are part of consolidated results. In constant currency (1st Mar'17) terms, Africa revenues grew by 10.7 percent Y-o-Y led by strong growth in data and Airtel money transaction value.

Raghunath Mandava, MD, and CEO, Africa, said: "Airtel Africa's revenues grew by 10.7 percent on a Y-o-Y basis. Data traffic grew 88 percent, voice minutes increased by 37 percent and Airtel Money throughput grew by 45 percent on a Y-o-Y basis. EBITDA margin expanded by 10.3 percent Y-o-Y resulting in an EBITDA margin of 35.9 percent."

InFocus Vision 3 Pro first impression

"The acquisition of TIGO in Rwanda was completed during the quarter and I am delighted to welcome more than 3 million TIGO customers to the Airtel family. We continue to focus on expanding our revenue base, underpinned by strong investments in networks and contain costs," he added.