‘Tele­com Rev­enue Grow­ing for 1st Time Af­ter Jio En­try’

There is some sta­bil­ity re­turn­ing to the sec­tor, says Sing­tel’s Arthur Lang

The Economic Times - - Economy: Macro, Micro & More - Kalyan.Par­bat@ times­group.com

Kolkata: Sin­ga­pore Telecom­mu­ni­ca­tions, a ma­jor share­holder in Bharti Air­tel, sees ini­tial green shoots and some sta­bil­ity re­turn­ing to the In­dian tele­com in­dus­try. “To­tal tele­com in­dus­try rev­enue in In­dia as a whole, for the first time since the en­try of Re­liance Jio, has been grow­ing by a bit, so there is some sta­bil­ity,” Arthur Lang, CEO (In­ter­na­tional), Sing­tel, said at an earn­ings call on Thurs­day.

The lead­ing South­east Asian tele­com car­rier, which owns a shade over 39% in Bharti Air­tel, had re­ported a 77% year-on-year fall in net profit dur­ing the July-Septem­ber pe­riod to $667 mil­lion.

In­dia’s tele­com in­dus­try’s ad­justed gross rev­enue (AGR) had grown by 2.4% se­quen­tially dur­ing the April-June quar­ter of 2018-19. Air­tel’s con­sol­i­dated rev­enue in the Septem­ber quar­ter, which fell 6.2% on-year to ₹ 20,422 crore, was ac­tu­ally higher than the ₹ 20,080 crore re­ported in the first quar-


ter. Rev­enue from In­dia op­er­a­tions, which makes up nearly 68% of the to­tal, also fell only1% se­quen­tially in the sec­ond quar­ter to ₹ 14,920 crore.

Jio’s en­try more than two years ago had un­leashed a bru­tal price war that con­sis­tently led to rev­enue ero­sion of In­dia’s older car­ri­ers, in turn, drag­ging down the sec­tor’s AGR. Mar­ginal play­ers and the sec­tor con­sol­i­dated down to three large pri­vate play­ers mak­ing it an ideal mar­ket sit­u­a­tion for pric­ing power to re­turn over time.

Sing­tel’s Lang said the lim­ited de- cline of Bharti Air­tel’s av­er­age rev­enue per user (ARPU) — a key per­for­mance met­ric — in the Septem­ber quar­ter is also a pos­i­tive sign which sig­nals the Su­nil Mit­tal-led telco’s strate­gic fo­cus on the high-value cus­tomer seg­ment. “Air­tel’s ARPU has dropped on a quar­ter-to-quar­ter ba­sis, but at a much lower rate, which is re­flec­tive of its fo­cus on the high-qual­ity, high-value (cus­tomer) seg­ment, that also ex­plains the 7.5 mil­lion net (cus­tomer) adds on the 4G side,” Lang said.

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