Bharti Airtel Q2 net profit dips 76.5%

The company net profit declined to Rs 586.1 crore from Rs 1,615.10 crore profit in the corresponding quarter a year ago.

The consolidated revenues of the company spanning 17 countries - India, Sri Lanka and 15 in Africa - declined 11.7 per cent to Rs 21,777 crore for the reported period as compared to Rs 24,652 crore previous year.

The total revenue of Airtel - which has operations in 17 countries across Asia and Africa - fell 11.7 per cent to Rs 21,777 crore during the second quarter of the current fiscal, from Rs 24,651.50 crore in the year-ago period.

"Mobile market continues to experience value erosion and financial stress led by competitive pressures", the company added.

If we look at net profit of the company from a six-month period, Airtel earned Rs 710 crore from April to September 2017 compared to Rs 2923 crore in the same period in 2016, showing a plunge of 75.7%. It was lower than Rs 21,958 crore in the quarter ended June, but analysts said the limited sequential drop - after a sequential rise in the previous quarter - indicated slight easing of pressure in India as Jio raises tariffs gradually. These factors will eventually force consolidation among operators and exits as the industry has witnessed in the recent past, he added.

In an indication of how Airtel tried to retain its customers from moving to Reliance Jio's network, mobile data usage per customer during the quarter rose 308% to 4.08 GB per month as compared to 1 GB during the year ago period. Consequently, its net debt excluding the deferred payment liabilities to the Department of Telecommunications and finance lease obligations increased by Rs 2,554 crore sequentially in the quarter.

However, mobile data traffic has grown fourfold to 784 billion MBs in the quarter as compared to 178 billion MBs in the corresponding quarter past year.

However the company said its mobile data traffic has increased fourfold.

India's telecom industry is roiled by a price war triggered by the entry of billionaire Mukesh Ambani's wireless venture Jio in September past year. Although Jio has started charging for its data services, prices are below market rates and voice remains free on its network.

It can be recalled that Reliance Jio had launched its services, offering all services free of cost, exactly at the same time a year ago.

Average revenue per user (ARPU) fell 6% to Rs 145 in Q2 FY18.

The shares of the company closed at Rs 497.65 a piece, up by 0.98 per cent, on BSE.

Mayuresh Joshi, Angel Broking fund manager and sector expert, wasn't surprised by the sharp drop in Airtel's net profit, "as the July-September period is, typically, a seasonally weak quarter".

Airtels consolidated net debt rose to Rs 91,480 crore against Rs 87,840 crore in the previous quarter.