Bharti Airtel on Thursday surprised the Street by reporting a profit of Rs 119 crore for the September quarter contrary to expectations that the telco would report a loss.

Year-on-year, the profit figure shows a fall of 65 per cent brought on by tough competition in the domestic market following the entry of Jio.

Mobile service revenues in India fell 16.3 per cent to Rs 10,252 crore compared with Rs 12,245 crore a year ago.

During the second quarter, Reliance Jio had reported revenues of Rs 9,240 crore.

Bharti Airtel said the average revenue per user (ARPU) for the quarter came in at Rs 101 compared with Rs 142 a year ago. Revenues from India mobile services contribute close to 68 per cent of its overall revenues.

The company, however, feels the ARPU decline was because of the implementation of high value customer retention initiatives.

During the quarter, Airtel incurred a capex of Rs 5,886 crore, primarily to enhance its data capacities. This capex investment along with a decline in earnings before interest, taxes, depreciation and amortisation resulted in a cash burn of Rs 3,739 crore compared with Rs 1,896 crore in the corresponding previous quarter.

As on September 30, the company had 329.7 million customers compared with 288.2 million in the same quarter last year, an increase of 14.4 per cent.

Bharti Airtel said mobile data use per customer increased 125.6 per cent to 9,221 MBs during the quarter over the same period last year.

Bharti Airtel said its India revenues dropped to Rs 14920 crore from Rs 16736 crore a year ago largely because of the the drop in mobile revenues. However, in constant currency terms, Africa revenues grew 10.8 per cent over last year, led by a strong growth in data and Airtel money transaction values.

Consolidated revenues for the quarter stood lower at Rs 20,423 crore compared with Rs 21,777 crore a year ago, primarily on account of the sustained pricing pressure in the India mobile segment.

“Led by our focus on quality customers through simplified pricing and content partnerships, ARPU decline has moderated in this quarter. We remain focused on driving quality base growth with value adding propositions for our customers. We also remain committed to investing in enhanced capacities and have deployed more than 27000 broadband sites during the quarter, enabling a 239 per cent year-on-year growth in mobile data volumes,” Gopal Vittal, MD and CEO (India & South Asia), said.

Ahead of the announcement, shares of Bharti Airtel closed almost 7 per cent lower at Rs 295.85.