Airtel Q3 profit dips 39% to ₹306 crore
SCORECARD Revenue falls 13% to ₹20,319 cr in OctDec NEWDELHI:
India’s largest telecom operator Bharti Airtel on Thursday reported over 39% fall in its consolidated net profit for the third quarter ended December 31, 2017 to about ₹306 crore.
The company’s net profit stood at ₹504 crore in the same period previous fiscal.
The company, which competes with operators like Vodafone, Idea Cellular and newcomer Reliance Jio in the highlycompetitive telecom market in India, saw its overall revenue decline 13% to ₹20,319 crore.
Its revenue was pegged at ₹23,336 crore in the corresponding period last financial year.
“Regulatory fiat in the form of a cut in domestic IUC (Interconnection Usage Charges) rates has exacerbated the industry ARPU (Average Revenue Per User) decline in Q3’18,” Gopal Vittal, MD and CEO, India and South Asia, Bharti Airtel said in a statement.
He added that the recent decision to reduce International termination rates “will further accentuate this decline and benefit foreign operators with no commensurate benefit to customers”.
The company’s overall customer stood at 394.2 million across 16 countries, which was 9.2% higher over the year-ago period.
“India revenues for Q3’18 at ₹15,294 crore have declined by 11.3% year on year (15.1% on reported) on an underlying basis, adjusted for the impact in reduction of domestic termination rates,” the company statement said.
On the other hand, its Africa revenues were up 5.3% over the same quarter previous fiscal (in constant currency terms).
The company’s consolidated net debt rose to ₹91,714 crore as against ₹91,480 crore in the previous quarter.
“The company’s Board has declared an interim dividend of ₹2.84 per share, which is a complete pass through of dividend received from subsidiaries,” the statement added.
The results were declared after market hours. Bharti scrip closed 1.17% lower at ₹494.50 a piece on the BSE on Thursday.
Mint reported on January 15 that the Telecom Regulatory Authority of India’s (Trai) decision to reduce the international call termination charge from 53 paise a minute to 30 paise a minute will crimp the earnings of Bharti Airtel Ltd, Idea Cellular Ltd and Vodafone India Ltd, according to analysts.
The latest move by the telecom regulator is expected to result in an annualized Ebitda hit of ₹500 crore to Bharti Airtel and ₹620 crore to the proposed combined entity of Idea Cellular and Vodafone India, a report by Kotak Institutional Equities dated January 15 said.
Ebitda—or earnings before interest, tax, depreciation and amortization—is a measure of operating profitability.
The cut in international call termination charge could result in Bharti Airtel’s Ebitda for the January-March quarter falling by ₹84 crore, according to Mint calculations, based on estimates by Kotak Institutional Equities. The termination charge is payable by an international long-distance operator to the Indian telecom operator on whose network an overseas call terminates.
(WITH MINT INPUTS)