India's Bharti Airtel has reported a steep 75% decline in first quarter profit as a result of the intense competition triggered by the entry into the market of Reliance Jio Infocomm.
Net profit fell to 3.67 billion rupees ($56.9 million), marking the Indian incumbents third straight quarter of declining income.
Revenue meanwhile fell 2.6% to 255.46 billion rupees, with India revenue down 10% to 172.44 billion rupees, driven by a 14.1% decline in mobile revenues to 129.15 billion rupees.
By contrast, African revenues grew 1.5% year-on-year in constant currency terms. But African mobile revenues fell to 48.53 billion from 62.49 billion a year earlier.
The steep decline was felt despite the operator increasing its total customer base by 6.2% to 379.9 million across 17 countries. In India, the operator also reported a record 5.2 million customer increase in data subscriber base during the quarter.
“The pricing disruption in the Indian telecom market caused by the entry of a new operator [Jio] continued with industry revenues declining over 15% YoY, creating further stress on
sector profitability, cash flows and leverage,” Airtel CEO for India and South Asia Gopal Vittal commented.
“Consequently, our [Indian] revenues declined 10% and EBITDA margin eroded by 5.3% YoY. We remain committed to providing the best value & experience to our customers and continue to invest towards it. As a result, our network witnessed data and voice traffic growth of 200% and 34% YoY respectively.”