Airtel net dips 72% amid Jio onslaught

Bharti Airtel Ltd reported a 72% drop in quarterly profit on Tuesday, missing analysts’ estimates, as free voice and data services offered by Reliance Jio until March 31 undercut rivals and forced them to slash tariffs to retain customers.

Net profit fell to ₹373.4 crore in the three months ended March 31 from ₹1,319.2 crore in the year earlier, the company said. A Bloomberg poll of 15 analysts expected Airtel to report a ₹542.5 crore profit.

This is the second straight decline in quarterly profit at the country’s largest telecom company. Profit fell 55% in the three months ended December 31.

Revenue fell 12% to ₹21,934.6 crore in the March quarter.

Bharti Airtel’s average monthly revenue per user fell sharply to ₹158 in the March quarter from ₹194 a year ago. Average data revenue per user declined to ₹162 from ₹196.

Data ARPU fell 4.5% to ₹185 in the year ended March 31 from ₹194 in the previous year. The number of minutes spent on calls on its network, however, grew 13.4% in the full year.

“The year was marked by several business and industry developments including the entry of a new operator in India, offering free voice and data, leading to an unprecedented wave of consolidation in telecom sector in India,” the company said in its quarterly report.

Jio offered free voice calls and data until December 31, 2016 in a promotional offer, and later extended it to 31 March, and further to June end, when it was forced to withdraw the offer on data. Jio has signed up more than 100 million subscribers since its launch in September.

Bharti Airtel and other operators responded by lowering prices to retain customers. The annual revenue of Indian telecom firms declined for the first time since 2008-09 to ₹1.88 lakh crore in 2016-17 (from ₹1.93 lakh crore the previous year), and is likely to decline further to ₹1.84 lakh crore in 2017-18, CLSA said in a report released on April 7.