Although Airtel's net profit fell during the third quarter, its flat ARPM indicates a stable tariff environment in the Indian telecom industry
Bharti Airtel Ltd, India's largest telecommunications company, today reported a 41% dip in third quarter net profit mainly due to re-branding cost, increased net interest cost, forex losses and higher spectrum charges.
For the quarter to end-December, the telecom operator said its net profit fell to Rs1,303.3 crore from Rs2,194.9 crore even as its total revenues increased 51% to Rs15,576 crore.
During the quarter, Bharti Airtel undertook re-branding, which cost it Rs340 crore, while adverse foreign currency fluctuation in Africa and India resulted in an exchange loss of Rs151 crore for the company. The company said its revenues also fell due to a Rs80 crore increase in spectrum charges in India and an increase of Rs471 crore in net interest outgo.
Sunil Bharti Mittal, chairman and managing director, Bharti Airtel, said, "In India we have commenced a new journey with the rollout of 3G services and the pilot launch of airtel money. In Africa, we have been focussed on developing a long-term sustainable business model that will transform the Africa market in terms of network coverage, quality of services and affordability."
Bharti's average revenue per minute (ARPM) declined to 44.2 paisa from 44.4 paisa and minutes of usage (MoU) also declined 1% to 449 minutes on a quarter-on-quarter (q-o-q) basis. The flattish ARPM is certainly positive for the Indian telecom industry and continues to resonate that competitive pressures are peaking. In other words, it also indicates a stable tariff environment.
The company's performance in Africa was also good, with strong subscriber addition and stable average revenues per user (ARPU). During the quarter, Bharti Airtel added two million subscribers, taking its total subscriber numbers in Africa to 42 million. In Africa, the company's ARPU remained flat at $7.3 and MoU increased 7% to 120 minutes.
Airtel has about 200 million mobile subscribers at present-about 152 million of them in India, 42 million across Africa and almost five million in Bangladesh and Sri Lanka. In India, it has 3.3 million telemedia and 4.9 million digital TV customers. During the last quarter, Bharti's share of net additions was 14.2% of all-India wireless subscriber net additions.