News Worms
News Worms


Battling With Reliance Jio, Airtel Reports Sharp Drop In Profits

Battling With Reliance Jio, Airtel Reports Sharp Drop In Profits

India's largest telecom operator Bharti Airtel today reported 76.5 percent decline in consolidated net profit to Rs 343 crore for the September quarter.

India revenues for September quarter at Rs 16,728 crore declined 13 per cent year-on-year, caused primarily by mobile revenue drop of 16.8 per cent.

In terms of revenue, country's largest telco made a sales of Rs 21,777 crore in Q2, 2017 as against Rs 24,652 crore in the same period a year ago - a decrease of 11.7%.

The standalone revenues for the quarter just ended, at Rs 21,777 crore, represented a year-on-year drop of 10.4% (reported drop of 11.7%) on an underlying basis (that is adjusted for Africa- and Bangladesh-divested operating units and tower assets sale). "Mobile market continues to experience value erosion and financial stress led by competitive pressures", the company said.

"Our view is in next 3-4 years we are likely to see 3G network actually shut down faster than 2G network because there are still 50 per cent of phone being shipped out in India that are feature phones", Gopal Vittal, MD and CEO, India and South Asia, Bharti Airtel, said during earnings call on Wednesday. Mobile broadband customers increased by 33.6% to 55.2 Mn from 41.3 Mn in the corresponding quarter previous year. These factors will eventually force consolidation among operators and exits as the industry has witnessed in the recent past, he added.

Nilanjan Roy, its global finance head, said as there was an explosion of data traffic in India, the company had decided it should hasten the rollout of fourth-generation (4G) technology, beside the building of additional capacity and fibre connectivity. EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 2.3 percent sequentially to Rs 8,003.7 crore and margin expanded by 120 basis points to 36.8 percent for the quarter.

However, mobile data traffic has grown fourfold to 784 billion MBs in the quarter as compared to 178 billion MBs in the corresponding quarter past year.

Net interest costs of the company have risen to Rs 1,905 crore from Rs 1,603 crore in the corresponding quarter past year, largely due to lower investment income.

Led by the smart surge in the stock, the companys market valuation zoomed Rs 16,290.02 crore to Rs 2,15,220.02 crore.

The company's consolidated net debt increased to Rs 91,480 crore from Rs 87,840 crore in the same quarter past year.

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