Local telecom giant Bharti Airtel has reported its first quarterly loss in 14 years on Thursday, bludgeoned by the brutal war for market share unleashed by Reliance Jio, whose rock-bottom rates have led to a loss of customers.
Airtel’s consolidated net loss for the June quarter of 2019 was Rs 2,866 crore compared with a profit of Rs 97 crore a year ago. Revenue rose 4.7 per cent to Rs 20,738 crore from Rs 19,799 crore a year ago. Revenue from the India wireless business grew 4.1 per cent year-on-year to Rs 10,724 crore.
Analysts were expecting the company to report a loss of Rs 1,017 crore.
Both Airtel and Vodafone Idea have been under pressure ever since Jio launched its services in September 2016 and shook up the market.
Government data showed that Jio had shoved off Airtel to become India’s second-largest operator by subscribers as of May.
Airtel said it ended the quarter with 403.7 million customers, down 12 per cent over last year.
The New Delhi-based company said its monthly churn rate in India, a measure of the number of customers it lost, grew to 2.6 per cent for the quarter against 2 per cent a year ago.
Jio had reported a churn of 0.97 per cent for the quarter ended June 30. The company said it made a net addition of 24.5 million subscribers during the quarter.
Gopal Vittal, MD and CEO (India and South Asia) of Bharti Airtel, said the first quarter has begun with a “healthy and equitable growth across all our lines of businesses”.
“Headline pricing remained stable, albeit at low levels. We continue to remain focused on providing value to customers through our rewards platform, Airtel Thanks. This has led to the second consecutive quarter of ARPU increase,” he said.
In comparison, Reliance Jio generated Rs 11,679 crore in operating revenue in the June quarter, beating Bharti Airtel on this metric. Last week, Jio, for the first time, surpassed Vodafone Idea, which posted a revenue of Rs 11,269.9 crore, despite having more subscribers than Jio. With this, Jio is now the number one telco in terms of revenue.
The results underscore the sustained struggle of Bharti Airtel and other telecom operators in India to grow profits despite recording higher data and voice consumption.
Mobile data traffic has nearly doubled to 3,904 petabytes in the first quarter from 2,003 petabytes a year ago.
Consolidated EBITDA improved 24.2 per cent year-on-year to Rs 8,493 crore. Airtel’s consolidated net debt was Rs 1.16 trillion as of June end. However, the silver lining for the company is that its average revenue per user from India mobile services rose to Rs 129 from Rs 123 in the preceding March quarter. This is the highest across telcos. Jio’s ARPU for the June 2019 quarter was Rs 122 and Vodafone Idea was Rs 108.
“We have a re-farmed spectrum from 3G networks to 4G across both the 900MhZ and 2100 MhZ bands and begun the process of shutting down 3G networks in India. This has enabled us to deliver improved indoor coverage as well as enhance our capacities. Our underlying operational efficiency and customer-first mindset keep us on track to grow our market share,” Vittal said.
