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Markets have given a thumbs up to Bharti Airtel's numbers increasing its stock price by 5.2 per cent after the company posted a 26 per cent drop in its profits thanks to forex losses. More than the broad numbers it is the break-up of its revenue from various division which throws an interesting picture. One that both the promoters and the shareholders need to worry about going forward.
The sharp growth in mobile data revenue can be a cause of worry going forward. Revenue from this stream has increased at a breakneck speed of 100.5 per cent over the previous year. They now account for 7 per cent of the total revenue. While the growth is no doubt appreciable, it has come at a cost to Bharti's higher yielding revenue stream.
Mobile data revenue is the sum total of revenue collected on account of data downloaded by a subscriber. These not only includes the movie and songs download but also include those that have been consumed for using free services like Whatsapp, Line, VChat among others.
When two people are talking using the services of Line or when they are chatting using Whatsapp services, mobile data revenues is accumulated by the service provider. This comes at the cost of a normal call which could have been made or the revenue from SMS services which was the earlier medium of chatting.
Bharti's quarterly revenue have started showing the impact of these free services. As seen from the table average revenue per user (ARPU) from its mobile services has declined from Rs 200 to Rs 192 which was mainly on account of voice ARPU which fell from Rs 166 to Rs 160 in September 2013 as compared to its previous quarter.
| Unit | Sep-13 | Jun-13 | Sep-12 | |
| Mobile Services | ||||
| Customer base | Million | 193.5 | 191 | 185.9 |
| Average revenue per user (ARPU) | Rs | 192 | 200 | 177 |
| Voice ARPU | Rs | 160 | 166 | 148 |
| Messaging & VAS* as % of revenue | % | 6.7 | 8.2 | 10.1 |
| Voice usage per consumer | min | 437 | 455 | 417 |
| Data | ||||
| Data Customer base | Million | 50.6 | 46.6 | 40.6 |
| Data as % of mobile revenue | % | 9.2 | 7.4 | 5.2 |
| Data ARPU | Rs | 70 | 63 | 43 |
| Data usage per customer | MB | 231 | 203 | 133 |
| * VAS -- Value added services | ||||
Similarly messaging and value added services revenue as a per cent of mobile revenue has fallen from 8.2 per cent to 6.7 per cent during the same quarters. This segment contributed almost 10.1 per cent of the revenue a year back.
These losses were compensated by data services which saw its contribution to revenue increase from 7.4 per cent in June 2013 quarter to 9.2 per cent in September 2013 quarter. Data contributed only 5.2 per cent of the mobile revenue in September 2012 quarter.
Growth of data customers base has been higher than overall customer base. Bharti Airtel now has 50.6 million customer compared to 46.6 million a quarter back and 40.6 million a year back.
But the most important number is that Bharti earns an ARPU of Rs 70 from data usage as compared to Rs 160 from voice, which is less than half. Customers shifting to free services is costing the company dearly.
If this trend continues, which is expected to be the case as seen from the sharp jump of 20 million Blackberry Messenger (BBM) users in a week of launching an android product, Bharti and the entire telecom sector has reasons to worry.
