Airtel Q4 profit plunges 78% to ₹83 cr, lowest in nearly 15 years
NEWDELHI: Bharti Airtel Ltd’s net profit fell 78% in the March quarter as the telecom regulator slashed international call termination charge and a brutal tariff war triggered by the entry of Reliance Jio Infocomm Ltd continued unabated.
Net profit fell to ₹83 crore in the three months ended March 31 from ₹373 crore in the year earlier, India’s largest telecom operator said in a statement on Tuesday.
This is the company’s lowest quarterly profit in nearly 15 years, a Reuters report said.
Telecom operators, already reeling from a fierce price war that started with the entry of Reliance Jio in September 2016, were hit hard in the December quarter after the telecom regulator’s decision to slash interconlong nection usage charges (IUC) levied by mobile networks handling incoming calls from rival networks.
Later, in another blow to operators, the regulator also cut the international call termination charge from 53 paise a minute to 30 paise a minute, effective February 1. The termination charge is payable by an international distance operator to the Indian telecom operator on whose network an overseas call terminates.
“The India mobile business has posted a loss on EBIT (earnings before interest and tax) level at ₹482 crore. They have been able to show an overall profit as cost rationalisation is saving the company. Also, the company recorded a net tax credit of ₹300 crore in Q4, which has inflated the net profit. If you look at the ARPU (average revenue per user), it is ₹116; the market was expecting ₹118,” a Mumbaibased telecom analyst said on condition of anonymity.
“Overall, the outlook for the sector looks negative and the pricing pressure is here to stay for few more quarters.”
Consolidated revenue dropped to ₹19,634.3 crore in the March quarter from ₹21,934.6 crore in the year earlier.