Africa’s operations boost Bharti Airtel profit to $52m

From $78million loss the preceding year, the African operations of Indian telecommunications giant, Bharti Airtel, has fetched it about $52 million profit in first quarter of the current operation year. The rise in profit has been helped by the growth in data customers and consumption.
According to Economic Times Telecoms report, Bharti Airtel, had almost 380 million customers across India, South Asia, and 15 countries in Africa at the end of June. In India, which makes up about 78 per cent of overall revenue, the company had about 281 million mobile subscribers, up 2.6 per cent from the March quarter.
Collectively, the firm reported that the percentage of users leaving the network rose to 3.8 per cent from 3.6 per cent in the Q1due to competitive pressures.
Bharti Airtel said its quarterly net profit slumped 75 per cent to the lowest level in four and a half years, as its voice and data businesses continued to suffer from the price war triggered by Reliance Jio Infocomm’s dirt cheap offerings, most especially in the Indian market.
The company recorded revenue declined of 14 per cent to Rs 21,958 crore from a year earlier, as data and voice rates fell. It was higher than Rs 21,935 crore in the quarter ended March, which some analysts said indicated slight easing of pressure after three successive quarterly declines. Revenue from India dropped 10 per cent year on year.
The Managing Director and Chief Executive Officer, India & South Asia at Airtel, Gopal Vittal, said in a statement, “The pricing disruption in the Indian telecom market caused by the entry of a new operator continued with industry revenues declining over 15 per cent Y-o-Y, creating further stress on sector profitability, cash flows and leverage. Consequently, our revenues declined 10 per cent and earnings before interest, taxes, depreciation and amortisation (EBITDA) margin eroded by 5.3 per cent on year.”
He said that the fall in rates resulted in data usage tripling and voice traffic growth of 34 per cent on year. “We also added 5.2 million data customers in the last quarter – our highest ever,” Vittal said.
Bharti Airtel’s net profit of $52 million in Africa was on marginal growth in revenue to $736 million, also helped by currency appreciation.
The Chief Executive for Africa, Raghunath Mandava, said: “Organic revenue growth for the quarter was 1.5 per cent Y-o-Y, though our efforts to optimise unprofitable revenue streams resulted in higher net revenue growth of 3.3 per cent.
New Know your customer (KYC) norms impacted customer additions and consequently revenue growth in the quarter.
He said data consumption and revenue increased by 75 per cent and 11.3 per cent, respectively, on year.