Bharti Q2 net up 10% on high data usage

Also records one-time exceptional gain of Rs 660 cr from sale of tower assets in Africa

Bharti Airtel, India’s largest telecom operator, on Monday reported a 10.1 per cent rise in net profit for the September quarter to Rs 1,523 crore, owing to a surge in data consumption and a one-time exceptional gain of Rs 660 crore from the sale of African tower assets. On a consolidated basis, it had recorded a profit of Rs 1,383 crore for the year-ago period.

Total revenue rose 4.3 per cent to Rs 23,836 crore, compared with Rs 22,845 crore in the year-ago period.

Consolidated mobile data revenue rose about 50 per cent to Rs 3,806 crore, due to 76.3 per cent growth in traffic. For India, mobile data revenue stood at Rs 2,893 crore, up 60.3 per cent. This was led by a 27.2 per cent increase in data customer base and a 69.9 per cent rise in data traffic, the company said.

This follows the recent launch of fourth-generation (4G) services in India to capture the growing appetite for data services. Bharti Airtel has been the frontrunner in the 4G launch; others, including Idea Cellular and Vodafone, are planning to launch these services soon. Analysts expect a tariff war in the data space, once the Mukesh Ambani-owned Reliance Jio launches 4G services, expected next year.

Adjusted for the impact of the divestment of its assets, Airtel’s Africa revenue rose 5.1 per cent, the most in the past four quarters, to $1,028 million, against $978 million in the same quarter last year.

In the first half of this year, the company divested tower assets worth $1.7 billion, said Airtel Africa Managing Director and chief executive Christian de Faria. For Africa, the company’s net loss widened to $170 million during the September quarter from $124 million in the year-ago period.

In July this year, Airtel had said it was in talks to sell units in Burkina Faso, Chad, Republic of Congo and Sierra Leone to France’s Orange SA. At that time, analysts had said it could be a precursor to Bharti’s exit from Africa in the long run.

In a note, Kotak Institutional Equities has said the company’s financials for its Africa operations in the September quarter are a positive surprise. “Bharti grew ahead of competitors. Africa revenues and Ebitda (earnings before interest, tax, depreciation and amortisation) were five per cent and nine per cent ahead of our expectations, respectively. Adverse forex movements meant losses in Africa expanded quarter-on-quarter. Africa operating trends were healthy, with solid sequential voice volume growth sustaining for the second consecutive quarter and without much voice RPM decline during the quarter.”

Mobile data revenue contributed 21.5 per cent to India revenue, up from 14.5 per cent in the year-ago period. Data average revenue per user (ARPU) increased by Rs 42 to Rs 193 (year-on-year) in the September quarter, led by a 35.9 per cent increase in data usage per customer. On the data side, 114,960 million MBs were recorded, up 70 per cent year-on-year. Data ARPU increased 28 per cent to Rs 193, while data usage per customer rose 36 per cent to 765 MBs.

In Africa, where Bharti Airtel operates in 17 countries, data usage surged. Data ARPU grew 10 per cent year-on-year to $3.4, while data usage per customer increased 59 per cent to 403 MBs. The total number of MBs on the company’s network rose 104 per cent to 16,483 million MBs.

“In India, Airtel’s revenue growth accelerated to 13.3 per cent in the September quarter on an underlying basis, the highest in the past 12 quarters. With the commercial launch of 4G services across 334 towns and the rollout of 3G services in our gap circles, we are now best positioned in the sector to leverage the fast-growing data market,” said Bharti Airtel Managing Director and chief executive (India and South Asia) Gopal Vittal.

Kotak Institutional Equities said Bharti reported data revenue and volume growth of 60 per cent and 70 per cent year-on-year, respectively, marginally weaker than Idea on both counts. “This was one area where we were a tad disappointed; Bharti’s first-mover advantage on 4G long-term evolution rollouts has not started translating into superior data growth rates, at least as far as early readings are concerned,” the note said.

In the September quarter, there was a sequential decline in voice minutes in India. Overall minutes on the network decreased to 336,002 million from 342,987 million in June quarter. The churn rate in India increased to 3.5 per cent from 3.1 per cent in the year-ago period, primarily due to competitive pressures. Voice realisation per minute dropped by 3.11 paise year-on-year to 34.58 paise, while voice ARPU fell six per cent to Rs 140.

For Africa, total voice minutes on the Bharti network increased 20 per cent to 34,620 million but voice ARPU declined 12 per cent to $3.1.

For the September quarter, Ebitda stood at Rs 8,265.3 crore, up 6.7 per cent compared with Rs 7,749.4 crore in the year-ago period.

As of September-end, the company’s net debt was Rs 70,777 crore. During the September quarter, Airtel’s mobile business in India incurred capital expenditure of Rs 3,101.5 crore, primarily on enhancing data capabilities.