Bharti Airtel returns to revenue growth of 1% in Q3, profits still lower


Indian operator Bharti Airtel reported a return to revenue growth in its fiscal third quarter to December, with revenues up 1 percent year-on-year to INR 205.2 billion. While mobile revenues remained under pressure due to the fierce competition in India, the decline was limited to 5 percent, and Airtel grew revenues in the TV and enterprise segments as well as in Africa. 

EBITDA was still down 17 percent to INR 63 billion, and the margin fell to 30.7 percent from 37.3 percent a year ago. A sharp increase in the tax bill led to a 72 percent fall in net profit to INR 862 million. 

Capex rose slightly, by 2 percent to INR 65.7 billion, as spending in Africa more than doubled and the operator invested in expanding broadband coverage to meet the strong growth in mobile data traffic. This left operating cash flow negative, at INR 2.6 billion versus a positive INR 11.2 billion a year earlier. While total net debt was lower on a quarterly basis, the fall in EBITDA led to a small increase in leverage to 4.28x. 

Indian revenues down 3%

In India, total revenues fell 3 percent to INR 148 billion, and EBITDA dropped 29 percent to INR 41 billion. Mobile revenues declined 5 percent year-on-year to INR 102 billion, while the digital TV business grew 7 percent to INR 10 billion and B2B services were also up 7 percent, to INR 31 billion. 

Airtel changed its customer definition during the quarter to count only customers actively generating revenue. This led to a net loss of 48.5 million mobile customers in India compared to September, for a total base of 284.2 million. ARPU was pushed up 4 percent on a quarterly basis to INR 104, the first sequential increase in nine quarters. 

Data customers increased 10 percent from the previous quarter to over 107.5 million, including over 77 million on 4G, up 17 percent from Q2. Data traffic nearly tripled year-on-year to over 3.2 billion MB, and average usage per customer was double a year ago, at 10.5 GB. Airtel upgraded around 24,000 base stations for mobile broadband during Q3 to meet the demand, as well as expanding its fibre network. 

Africa near 100 mln customers

In Africa, customer growth strengthened to 3.8 million net additions, for a total base of 97.92 million customers at the end of December. ARPU was largely stable at USD 3. Data customers increased to 30 percent of the total base, and total data traffic was up 61 percent year-on-year as Airtel nearly doubled the number of mobile broadband base stations compared to a year ago. Mobile money customers rose 32 percent year-on-year to 13.8 million, and revenues from the services were up 23 percent to USD 68 million.

Total revenues in Africa rose 11.2 percent to USD 853 million, led by the growth in data and mobile money services. EBITDA improved to USD 317 million from USD 272 million a year ago, and the margin was up 1.7 percent points to 37.2 percent. The increase in capex led to a drop in operating free cash flow, to USD 147 million from USD 197 million. 

Source: Telecompaper.com