Airtel Q1 net up 24 per cent

Airtel Q1 net up 24 per cent

But the company's revenue growth was affected by the drop in mobile termination charge to 10 paise and stiff competition. The consolidated revenue for April-June quarter grew 17.2 per cent year-on-year to Rs 9,942 crore as per US accounting standards.

A foreign exchange gain of Rs 250 crore in the quarter, as against a loss of Rs 168 crore a year ago, helped boost profit. Meanwhile, shares fell 1.09 per cent to close trade at Rs 813.90 on the BSE due to the prospects of revenue fall in future due to competition.
Competition led to a drop in key parameters such as average revenue per user and minutes of usage, its Deputy CEO Sanjay Kapoor said.

Bharti added an overall 8.55 million customers, its highest-ever for any quarter to date on a net basis. Analysts said revenue grew softly as ARPU (average revenue per user) and (average) MoU (minutes of usage) have fallen  besides the loss of  income due to low mobile termination charges.

About 60 per cent of the company's new users currently come from the rural areas and the company expects this to increase to 75 per cent, Bharti Airtel CEO & Joint MD Manoj Kohli told reporters.

Bharti's shares are valued at over USD 32 billion.

Bharti's average revenue per user fell 20.6 per cent to Rs 278 in April-June from a year ago and the minutes of usage also fell 11 per cent to 478 minutes. Its margin improved to 42 per cent on higher profitability and EBITDA, a measure of profitability, also surged to Rs 4,152 crore, a growth of 18 per cent.

Bharti's Gupta said the company will be able to sustain its growth in the next few years, as it was adding over 60 per cent of its new users mainly in rural areas and small towns — a key focus area for the company to increase subscriber base.

The company, which is currently taking incremental expansion of network, has announced it will have a capex of USD 3.2 billion in the fiscal that includes USD 2.2 billion for Bharti Airtel and USD 1 billion for its infrastructure business.

"Our capex will be USD 3.2 billion same as last year", Gupta said.
He said the company is not looking at the listing of its infrastructure businesses -- Bharti Infratel or Indus Towers (which is consortium between Vodafone, Bharti and Idea) not for the next two to three years.

India had 415 million mobile users at the end of May, second only to China. Bharti Airtel, in which Singapore Telecom holds a 30 per cent stake, competes with Reliance Communications, the local unit of the UK's Vodafone Group PLC and state-run BSNL for a share of the world's second-largest market with 415.25 million wireless users.
The company has a wireless market share of 24 per cent. It added the highest ever net subscribers of 8.55 million in the first quarter. Its overall customer base is at 105.20 million.

Analysts added that revenue growth was hurt by the recent reduction in the call termination charge. This also hurt the ARPU, which is already under pressure because of the company's expansion into low-income rural areas.

The call termination charge refers to a fee which the call-originating company pays to the called network. The government earlier this year reduced the termination charge for domestic calls to 0.20 rupees a minute from 0.30 rupees earlier.

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