EDITIONS
Stories

Airtel reports lowest profit in four years because of Jio and demonetisation

Press Trust of India
25th Jan 2017
9+ Shares
  • Share Icon
  • Facebook Icon
  • Twitter Icon
  • LinkedIn Icon
  • Reddit Icon
  • WhatsApp Icon
Share on

Bharti Airtel, India's largest mobile services provider, today reported its lowest profit in four years as demonetisation and intense competition with Reliance Jio hit revenues.

Consolidated net profit in October-December fell 54 per cent to Rs 503.7 crore as against Rs 1,108.1 crore in the same period a year ago, the company said in a statement. Gopal Vittal, the CEO of Bharti Airtel said,

The quarter has seen turbulence due to the continued predatory pricing by a new operator. This has led to an unprecedented year-on-year revenue decline for the industry, pressure on margins and a serious impact on the financial health of the sector

He said the 14 paisa it gets as termination charge for any call from rival network to its customers is "well below cost" and "has resulted in a tsunami of minutes terminating into our network." Jio, backed by India's richest man Mukesh Ambani, is offering free voice calls and data on its 4G network till March.

Bharti Airtel's revenue fell 3 per cent to Rs 23,363.9 crore in the third quarter of FY2016-17. Mobile data revenue slowed to Rs 4,049 crore due to "free voice and data offering by a new operator". Data revenues at Rs 3,087 crore de-grew by 3 per cent. Mobile broadband customers increased by 22 per cent. Mobile data revenues now contribute to 22.8 per cent of the company's mobile revenues in India as compared to 23.1 per cent in the corresponding quarter last year. Vittal added that at the same time revenue market share of Airtel has crossed a lifetime high of 33 per cent.


Also readAirtel unveils fresh packs to counter Jio heat


Airtel said that its India revenues were up by 1.8 per cent and that of Africa by 6 per cent on Y-o-Y basis.

India revenues for third quarter (stood) at Rs 18,013 crore grew by 1.8 per cent Y-o-Y. Slowdown in mobile revenue growth (was) primarily due to free voice and data offering by a new operator, the statement said.

The Indian arm of Airtel reported 9.3 per cent year-on- year (Y-o-Y) increase in customer base to 26.58 crore, close to 14 per cent increase in voice call minutes and 28.3 per cent increase in data usage. However, tariff war triggered by Jio, led to 10.4 per cent decline in the average revenue per user on its network to Rs 172 from Rs 192 during the period under review.


Also readJio to extend its flagship plan till June, but with a twist


The revenue realisation of Airtel India from a minute long voice call reduced by 12.8 per cent on Y-o-Y basis and from per megabyte of data it reduced by almost one-fourth to 17.97 paise from 23.77 paise a year ago. In Africa, Airtel saw impact of devaluation of Nigerian currency on Y-o-Y basis. The net loss of Airtel Africa business widened to USD 93 million compared to a loss of USD 74 million in the corresponding quarter last year. .

9+ Shares
  • Share Icon
  • Facebook Icon
  • Twitter Icon
  • LinkedIn Icon
  • Reddit Icon
  • WhatsApp Icon
Share on
Report an issue
Authors

Related Tags