Airtel Q3 profit slumps 39.3%

19 Jan 2018

India's Bharti Airtel has reported a 39.3% slump in Q3 profit to 3.06 billion rupees ($47.9 million) as a result of ongoing intense competition and the mandated cut in interconnection usage charges (IUC).

Revenue fell 8.4% year-on-year to 203.19 billion rupees, with India revenues down 11.3% year-on-year on an underlying basis, adjusted from the impact of the lower domestic termination rates.

India mobile revenue fell 17.6% despite a sixfold increase in mobile data traffic to 1.1 billion megabytes and a 64.9% increase in mobile broadband customers to 62.1 million.

Africa revenues meanwhile grew 5.6% year-on-year in constant currency terms, with mobile data traffic nearly doubling to 66 billion megabytes.

During the quarter, Airtel divested its Ghana operations and implemented additional cost control initiatives to improve ebitda margins for the region by 10.8% year-on-year to 35.5%.

Total net debt meanwhile grew to 917.14 billion rupees, with its net debt to ebitda ratio growing to 3.01 times compared to 2.91 times in the previous quarter.

Airtel ended the quarter with a total customer base of 394.24 million, which includes 290.1 million mobile subscribers in India, 84.1 million across Africa and 2.1 million in South Asia.

“Regulatory fiat in the form of a cut in domestic IUC rates has exacerbated the industry ARPU decline in Q3.The recent announcement of reduction in international termination rates will further accentuate this decline and benefit foreign operators with no commensurate benefit to customers,” Airtel CEO Goppal Vittal said.

“Continued investments in data capacities, strategic partnerships with content and handset providers and focus on customer friendly innovations like data rollover has led to healthy customer additions of 8.1 million during the quarter.”

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