Bharti Airtel reported net profit for its fiscal first quarter to June down 73.5 percent to INR 973 million, hurt by the continued price war in the Indian mobile market. Revenues fell 8.6 percent to INR 200.8 billion, as the acquisition of Telenor India could not offset the price pressure and cuts to termination rates. Excluding regulatory effects and divestments, Airtel said revenues were up 2.3 percent. EBITDA dropped 12.6 percent to INR 68.37 billion, and the margin fell to 34.0 percent from 35.6 percent a year ago.
Operating cash flow moved to a negative INR 13.8 billion, versus a positive INR 12.4 billion a year earlier. Airtel said it's focused on ensuring the highest broadband speeds and "aggressively expanding" its 4G capacity. As a result, capex rose 25 percent year-on-year to a record INR 82.2 billion.
The investments led to some "opex headwinds" in the quarter, the company said, adding that it remains focused on structural cost containment through its 'War on Waste' programme. The increase in costs was offset partly by a one-time gain of INR 5.2 billion for the creation of deferred tax assets in Nigeria.
The higher spending was focused in India, where capex reached INR 78.7 billion and over 22,000 base stations were upgraded for mobile broadband in the quarter. Revenues in India fell 13 percent to INR 149.3 billion, including a 19 percent fall in consumer mobile to INR 104.8 billion. EBITDA in India was down 24 percent to INR 49.1 billion, for a margin of 32.9 percent, down 4.6 percent points year-on-year. The weakness in consumer mobile was offset slightly by growth in the business and digital TV markets.
Airtel's mobile customers in India increased to 344.56 million at the end of June, up 13.3 percent from March and up more than 22 percent compared to a year ago thanks to the Telenor acquisition. ARPU was still down 8.8 percent on a quarterly basis and 31.7 percent year-on-year to INR 105. Data traffic increased five-fold from a year ago and individual average usage tripled to 7.9 GB. Voice traffic also jumped over 62 percent year-on-year and reached an average 700 minutes per customer.
In Africa, the customer base grew by 1.93 million in the quarter to 91.193 million. ARPU was down slightly to USD 2.9, while total revenues from continuing operations rose 14 percent to USD 794 million, helped by the acquisition of Tigo Rwanda earlier this year. EBITDA jumped 45 percent at constant currency rates to USD 289 million, and capex was up 12 percent to USD 49 million.
