Monday , November 29 2021

Airtel marks its first quarterly loss in 14 years


NEW DELHI: Bharti Airtel Ltd reported its first quarterly loss of 14 years amid a brutal price war launched by Reliance Jio Infocomm Ltd, which devastated its competitors and transformed the telecommunications market in India.

New Delhi-based Bharti Airtel has turned to a 2866 cut for the quarter ended June 30 from net profit of 97 crore a year earlier as funding costs increased and this caused a one-time loss of 1445 crores.

Bharti Airtel, which until last year was India's largest telecom operator, is struggling to raise prices and add subscribers due to the tariff war, although a wave of consolidation in India's telecom market has eliminated smaller telecommunications and forced Vodafone India Ltd and Idea Cellular. Ltd. for merger.

"The pressure on Airtel will continue as it has to bear the cost of managing multiple networks, given that its users are also on 2G and 3G. This is hurting the Airtel economy in the short term, "said Mahesh Upal, director at communications consulting firm ComFirst India.

Bharti Airtel's consolidated operating revenue grew 4.7% to 20 738 crores in the June quarter from 7 799 kroner. Revenue from wireless business in India grew 4.1% year on year 10 724 crore.

Generated by Reliance Jio 11 679 crore operating revenue in the quarter in June, beat Bharti Airtel by that metric. Last week, Jio surpassed Vodafone Idea Ltd, which reported revenue from 11 269.9 crore, although there are more users.

With this, Reliance Jio is already number one in revenue, achieving the rare feat of market leadership in the telecom industry in less than three years since launching in September 2016.

The results also underscore the continued struggle of Bharti Airtel and other Indian telecom operators to remain profitable despite recording higher data and voice consumption. The average Airtel user consumes 12GB data a month in the June quarter, up from 7.8GB a year ago.

Consolidated operating profit increased by 24.2% to 8 493 kroner a year earlier. The Indian wireless business of the company reported a loss of 1242 crore in the June quarter. Airtel's consolidated net debt was 1.16 trillion at the end of June

The silver lining for the company is that its average monthly user revenue (Arpu) from mobile services in India has risen to 129 in June quarter of 123 during the previous three months. This is also due to the fact that its subscriber base has shrunk.

Airtel's Arpu is the highest of telecoms in June, with Jio at 122 and Vodafone Idea at 108.

"Business revenue in India is stable, Arpu has grown and 4G base has also increased. These are positive factors, "said a fundamental analyst based in Mumbai, requesting anonymity.

The launch of low-cost tariff plans by Reliance Jio, a unit of Reliance Industries Ltd, has forced rivals to lower their rates, hurting profit margins. The smaller companies were forced to either close the store or acquire, leaving only Airtel, Jio and the merged company of Vodafone and Idea to compete in the Indian market.

The introduction of the company division for Africa proved to be a ray of hope. Airtel Africa reported revenue of $ 795.9 million, up 6.9% from $ 744.5 million a year earlier, largely driven by growth in Nigeria and East Africa.

Operations in Africa reported a profit of $ 132.2 million in the quarter in June.

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