Airtel quarterly profit falls again, though business in Africa progressing

Bharti Airtel saw its profit fall during its fiscal Q1 to end-June, as the operator was faced by regulatory and tax developments in India, and planned accelerated investments in India and Africa.

In a statement, Sunil Bharti Mittal, chairman and MD of the company, said: “Telecom revenues in India have been depressed due to hyper-competition and recent regulatory and tax developments… On the African side, we are gaining market share, benefiting from the significant investments made in the last two years.”

For the quarter to June 30, 2012, the company announced net income of INR7.62 billion (US$138.6 million), down by 37.3 per cent from INR12.2 billion, on revenue of INR193.5 billion, up 14 per cent year-on-year.

Stagnant EBITDA coupled with higher depreciation and amortisation arising from enhanced capex and licence fees resulted in the lower profit.

Mobile subscriber revenue in India during the period was impacted by two changes: Airtel said that guidelines from watchdog TRAI around processing fees restricted the sale of bundled tariffs; and a tax increase led to all telecom services becoming more expensive by two per cent.

For its India and South Asia mobile business, EBIT was INR17 billion, down 18 per cent, on revenue of INR106.8 billion, up nine per cent.

Positive news in India was a 44.2 per cent increase in mobile data revenue.

According to the Economic Times, the board of Airtel is also considering the sale of up to 10 per cent of its towers unit, Bharti Infratel. No timeline has been given for a decision.

In Africa, EBIT was US$62 million, up 23 per cent from US$50 million, on revenue of US$1.1 billion, up nine per cent from US$979 million. The company noted challenges on the horizon, however, including “economic and currency headwinds” in key markets, as a result of the Eurozone crisis, lower aid and grants, rising inflation, and “political issues” in some countries.

As a result of this, it has intensified its market operations, advertising and network rollouts, as well as pursuing new growth initiatives with 3G, Airtel Money, and in the Rwandan market.
Overall it saw a 13 per cent year-on-year growth in mobile subscribers to 250 million, driven by growth of 11 per cent in India & South Asia (to 194.2 million) and 20.6 per cent in Africa (to 55.9 million).

0 comments ↓

There are no comments yet...Kick things off by filling out the form below.

Leave a Comment