New Delhi: In a first major blow to telecom operators, India's leading service provider Bharti Airtel on Tuesday reported a 54 percent dip in its net profit for the October-December quarter due to turbulence from Mukesh Ambani's Reliance Jio.
In the same period a year ago, Airtel had posted a net profit of Rs 1,108.0 crore
Airtel, which had immensely depended on its data services for its profit, was adversely affected by the emmergence of Reliance Jio, which is offering unlimited 4G data, voice/video calls and messages.
Since its launch in September 2016, Reliance Jio has been offering free 4G services through its Welcome Offer which was later extended as Happy New Year offer and will continue till March 31, 2017, as per the last announcement made by Reliance Industries Chairman and Managing Director Mukesh D Ambani.
The consolidated income of Bharti Airtel declined by 3 percent during the reported period to Rs 23,363.9 crore from Rs 24,103.4 crore in corresponding period of 2015-16.
Bharti Airtel MD and CEO for India & South Asia Gopal Vittal in a statement said, "The quarter has seen turbulence due to the continued predatory pricing by a new operator. The present termination costs at 14 paise which are well below cost has resulted in a tsunami of minutes terminating into our network.
"This has led to an unprecedented year-on-year revenue decline for the industry, pressure on margins and a serious impact on the financial health of the sector."
Consolidated mobile data revenues of Airtel for the quarter was flat at Rs 4,049 crore compared to same period in previous fiscal.
Vittal added that at the same time revenue market share of Airtel has crossed a lifetime high of 33 percent.
Airtel said that its India revenues were up by 1.8 percent and that of Africa by 6 percent on Y-o-Y basis.
"India revenues for third quarter (stood) at Rs 18,013 crore grew by 1.8 percent Y-o-Y. Slowdown in mobile revenue growth (was) primarily due to free voice and data offering by a new operator," the statement said.
In Africa, Airtel saw impact of devaluation of Nigerian currency on Y-o-Y basis.
Consolidated net debt of Airtel increased by 24 percent to Rs 97,395.2 crore at the end of December 31, 2016, from Rs 78,451.5 crore in corresponding period a year ago.
"Net interest costs of Rs 1,810 crore have risen from Rs 1,360 crore in the corresponding quarter last year ? largely due to increased spectrum related interest costs. Forex and derivative losses for the quarter came in at Rs 126 crore compared to Rs 57 crore in the corresponding quarter last year," the statement said.
Shares of Bharti Airtel closed at Rs 316.35, down by 0.95 percent compared to previous close, on BSE today.
With PTI Inputs
