Bharti Airtel profit up 34%; Arpu jumps to Rs 190 in Q2
Bharti Airtel, the country’s second-largest telecom operator, on Monday reported a 33.5% quarter-on-quarter rise in its net profit to Rs 2,145.2 crore during the July-September quarter. However, the company missed the Bloomberg consensus estimates of Rs 2,327 crore due to higher forex fluctuation losses and lower profit from Indus Towers.
Consolidated revenues beat estimates and rose 5.25% sequentially to Rs 34,527 crore owing to strong additions in the 4G subscribers and an increase in average spends by consumer on its network. Bloomberg had pegged revenues at Rs 34,000 crore.
Consolidated Ebitda also beat estimates at Rs 17,721 crore and was up 6.7% compared with the preceding quarter aided by an increase in revenues. The Ebitda margin expanded to 51.3% from 50.6% in the preceding quarter on the back of lower spectrum usage charge.
The company’s India revenues were up 4.3% sequentially to Rs 24,333 crore, while mobile revenues were up 4.04% q-o-q to Rs 18,957.6 crore.
The average revenue per user (Arpu) saw a jump of 3.8% to Rs 190 compared with Rs 183 in the preceding quarter. The company’s Arpu continues to be the best in the industry, remaining ahead of Reliance Jio’s Rs 177.2. The growth in Arpu was on the back of continued momentum in 4G customer additions, upgrades of mobile plans from customers and feature phone to smartphone upgrade.
During the quarter, Bharti continued to lag behind Jio on data usage per customer. The company’s data usage per customer was at 20.76 GB whereas Jio’s was 22.2 GB. At 20.76 GB, Bharti’s data usage per customer was up 4.2% sequentially.
On minutes of voice usage per customer per month, while Bharti continued to be ahead of Jio, it witnessed a fall in its minutes like Jio during the quarter. Bharti Airtel’s minute of usage on the network fell 2% sequentially to 1,082 minutes. Comparatively, Jio’s average voice consumption on the network fell 3.2% q-o-q to 969 minutes.
Bharti Airtel’s monthly churn of subscribers saw a slight increase to 3.3% compared with 3% in the preceding quarter. On a net basis, the company’s total mobile subscribers saw a marginal increase to 327.8 million, aided by additions in 4G subscribers. In the September quarter, the company’s 4G subscriber base increased to 210.3 million, a jump of 2.5% q-o-q. 4G users now comprise 66.8% of the overall customer base of the company.
“We have delivered yet another quarter with competitive revenue growth and improved margins. Our consolidated revenue grew sequentially by 5.3% and Ebitda margin expanded to 51.3%. The consistency of our execution is driven by the strength and resilience of our portfolio. Our B2B and homes business continued their strong growth momentum, while mobile Arpu expanded to 190 on the back of premiumisation and deep customer understanding,” Gopal Vittal, MD and CEO (India and South Asia), said in a statement.
“We are now rolling out 5G and are confident that Airtel 5G Plus will deliver the best experience in India while being kinder to the environment. I do believe 5G technology has the potential of bringing tremendous innovation into India,” he added.
Vittal reiterated the company’s demand for further tariff increase in order to boost its Arpu and improve returns on investments. “At the same time we remain concerned about the low ROCE (return on capital employed) that our business delivers due to pricing that is the lowest in the world. Given the large investments required to drive digital adoption in India we believe there is a need for tariff correction,” he said.
In the September quarter, the company’s revenue from the wired broadband service rose 6.8% q-o-q to Rs 989.8 crore.
The company has been adding new subscribers in the home broadband space by leveraging its network of franchisees. The number of home broadband users jumped 8.7% sequentially to 5.2 million.
The company’s direct-to-home satellite broadcasting service, Airtel Digital, remained under pressure. Revenue from this business fell 2.6% q-o-q to Rs 728.8 crore. Total users, however, saw a marginal growth and increased to 17.5 million.
“The DTH business is showing early green shoots of recovery as an outcome of our strategy of simplifying pricing and offering converged propositions to win high-value customers,” the company said.
On Monday, Bharti Airtel’s shares closed up 1.8% at Rs 831.15 on the BSE.
