Bharti Airtel on Tuesday posted a 76.5% decline in its net profit to ₹343 crore for the second quarter ended September 2017, on account of “financial stress led by competitive pressures,” and warned that this may continue in the next quarter due to reduction in IUC rates.
Consolidated revenue
Bharti Airtel, India’s largest telecom services provider, which had registered a net income of ₹1,460.7 crore in July-September 2017, posted 11.6% decline in consolidated revenue to ₹21,776.9 crore from ₹24,651.5 crore in the year-earlier period.
“The financial stress in the industry continues due to double-digit revenue decline and will be further accentuated by the reduction in IUC rates in the next quarter,” Gopal Vittal, MD and CEO, India & South Asia, said in a statement.
He added that this would eventually force operator consolidation and exits as witnessed in the recent past.
India revenues during the quarter stood at ₹16,728 crore, a declined of 13% year-on-year, mainly due to drop of 16.8% in mobile business. Mobile data traffic for Airtel has grown four-fold to 784 billion MBs in the quarter compared to 178 billion MBs in the same quarter last year, the company said.
It added that net interest costs of ₹1,905 crore had risen from ₹1,603 crore in the same quarter last year – largely due to lower investment income, while forex and derivative loss for the quarter was at ₹422 crore compared to a loss of ₹302 crore in the same quarter last year. Consolidated net debt increased to ₹91,480 crore from ₹87,840 crore in the previous quarter. “Net debt excluding the deferred payment liabilities to the DoT and finance lease obligations has increased by ₹2,554 crore sequentially in the quarter.”
Raghunath Mandava, MD and CEO, Africa, said, “Airtel Africa underlying revenues grew by 2.8% Y-o-Y with net revenues growing 6.3% on the back of increase in data penetration. Data traffic grew by 83.8% Y-o-Y. Airtel Money continues to lead with transaction values growing over 30% Y-o-Y.”
