War with Reliance Jio bites: Bharti Airtel's Q3 profit drops 55%
Bharti Airtel on Tuesday said that its net profit for the quarter ended December 31, 2017 dropped 55%, at Rs 503.7 crore as against Rs 1,108 crore in the same period of last year.
The telecom operator further said that its consolidated revenues for the given quarter stood at Rs 23,336 crore, lower by 3% as against the same period of last year and 5.3% sequentially. Bharti Airtel said that its consolidated EBITDA, pure earnings, stood at Rs 8,570 crore, up 1.1% year on year while Consolidated EBITDA margin came in at 36.7%, up 1.5% as against the same period of last year led by Africa margin expansion of 4.9%.
The company said that price war with Reliance Jio has hurt business. It said, "India revenues for Q3’17 at Rs 18,013 crore grew by 1.8% Y-o-Y. Slowdown in Mobile revenue growth primarily due to free voice and data offering by a new operator."
Gopal Vittal, MD and CEO, India & South Asia, said: “The quarter has seen turbulence due to the continued predatory pricing by a new operator."
He said, "The present termination costs at 14 paise which are well below cost has resulted in a tsunami of minutes terminating into our network. This has led to an unprecedented year on year revenue decline for the industry, pressure on margins and a serious impact on the financial health of the sector."
"Consequent to the spectrum acquired worth Rs 14,281 crore during Oct’16 auction, the company’s consolidated net debt has increased to $ 14.339 billion from $ 12.232 billion in the previous quarter," Airtel said.
Vittal said, "Our commitment to provide a superior experience to our customers has led to revenue market share crossing a lifetime high of 33%. Airtel revenues grew by 1.8% Y-o-Y and our non-mobile businesses continue to grow at a healthy clip and now contribute a sizable 24% of our total revenues."