Mumbai: Bharti Airtel Ltd on Monday reported strong growth in its September quarter earnings, driven by a surge in mobile data consumption and an expanding subscriber base.
Net profit at India’s second-largest telecom operator jumped 89% from a year earlier to ₹6,792 crore. On a sequential basis, Airtel’s net profit rose 14.19% from ₹5,948 crore in the preceding quarter.
Airtel’s consolidated Q2 revenue of ₹52,145 crore was up 25.7% from the previous year and 5.4% from the preceding quarter. Revenue was driven by an increase in its mobile services business, with a focus on premium services and growth in Airtel Africa.
“Our India revenue, including passive infrastructure services, increased by 2.9%. Africa delivered another quarter of standout performance with constant currency revenue growth of 7.1%,” Gopal Vittal, Bharti Airtel vice-chairman and managing director, said in an earnings release.
Airtel’s earnings hold significance for the telco given the Supreme Court’s permission to the government to reconsider Vodafone Idea’s adjusted gross revenue (AGR) dues for the period up to 2016-17.
Investors are expected to track the company’s view on the tariff hike on Tuesday especially when Jio has ruled out any immediate plans to increase the tariff hikes.
Further, any guidance on whether Airtel would push for its case for AGR relief will be key. Earlier, Airtel had also urged the government to convert some of its AGR dues into equity.
Arpu: Airtel vs Jio
The telecom operator posted an average revenue per user (Arpu) of ₹256, up 2.4% sequentially from ₹250.
In comparison, India’s number one carrier Reliance Jio’s Arpu rose to ₹211.4 in the September quarter from ₹208.8 a quarter ago.
Arpu is a key metric of revenue performance and user monetization in the telecom industry.
Analysts at BNP Paribas, in a note dated 13 October, expected portfolio premiumization to be the reason behind the increase in Arpu for the company.
The removal of the entry-level plan of 1 GB per month amid the absence of a tariff hike during the quarter also led to an improvement in Arpu for the company.
To be sure, Airtel added 1.4 million mobile users in the September quarter, higher than 1.2 million mobile subscribers it added in the June quarter.
As of September end, the company’s total mobile subscriber base in the country was at 364 million.
Earnings before interest, tax, depreciation and amortization (Ebitda) rose 35.9% year-on-year and 6.2% sequentially in the second quarter to ₹29,919 crore.
On Monday, shares of Airtel ended at ₹2,077 on the National Stock Exchange, up 1.1% from the previous close. The company reported its earnings after market hours.
Africa market
For Airtel, the Africa market accounts for about 10.2% of its consolidated revenue.
In the September quarter, the revenue of Airtel Africa rose in constant currency terms on the back of an increase in data usage and Airtel Money expansion in the region.
Last year, Jio Platforms, through its subsidiary Radisys, announced its foray into the Africa market to provide network infrastructure in Ghana and not as a telecom service provider.
Radisys, a subsidiary of Jio Platforms, announced a partnership with Next-Gen Infra Co. (NGIC) to establish shared 4G and 5G fixed broadband network infrastructure in Ghana.
The partnership also involves digital infrastructure provider Ascend Digital, Finnish tech and telecom firm Nokia, Swedish telecom firm Ericsson and IT services major Tech Mahindra to roll out 5G infrastructure across Africa.
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