Bharti Airtel posts smallest quarterly profit in 4 years as Jio onslaught continues
The Bharti results highlight the turmoil in the world’s second-biggest cellphone market following the entry late last year of Reliance Industries’ new network operator Jio, which has forced Airtel and others to slash rates to retain customers.business Updated: May 10, 2017 12:54 IST
Bharti Airtel, India’s largest mobile telecoms network operator, reported its smallest quarterly profit in more than four years on Tuesday, as free services offered by upstart rival Reliance Jio sparked a price war which has eroded sales and margins.
The results highlight the turmoil in the world’s second-biggest cellphone market following the entry late last year of Reliance Industries’ new network operator Jio, which has forced Bharti and others to slash rates to retain customers.
Bharti Airtel said its net profit plunged nearly 72% from a year earlier to Rs 3.73 billion ($57.7 million) in the three months ended March 31, its fiscal fourth quarter, missing analysts’ forecasts of Rs 5.28 billion.
It was the company’s smallest quarterly profit since the December quarter of 2012, according to Thomson Reuters data.
Revenue from operations fell 12% to Rs 219.35 billion.
“The sustained predatory pricing by the new operator has led to a decline in revenue growth for the second quarter in a row,” Bharti Airtel Chief Executive Gopal Vittal said in a statement.
Jio began charging for its services in April, but analysts say low tariffs will continue to pressure industry revenues.
Bharti Airtel’s average revenue per user for mobile services in India fell 8% from the previous quarter to Rs 158.
Bharti Airtel, which operates in 17 countries across Asia and Africa, said its revenue from African operations rose 2.6 percent on the same period last year at constant currencies.
Jio’s onslaught has triggered consolidation in India’s ultra-competitive telecoms sector.
Vodafone Group Plc’s Indian subsidiary and Idea Cellular have agreed a $23 billion merger that will create the market’s biggest carrier, overtaking Bharti Airtel.
Meanwhile Bharti has taken over Norwegian Telenor’s operations in six states.
First Published: May 10, 2017 12:53 IST