Bharti Airtel reported a sharp fall in net profit for the fiscal second quarter to September, to INR 3.43 billion from INR 14.61 billion a year earlier, hurt by the tough competition in its home market from the entry of new operator Reliance Jio. Revenues fell 11.7 percent to INR 217.77 billion, and adjusted EBITDA was down 15.4 percent to INR 80.04 billion.
India revenues declined 13.0 percent from a year ago to INR 167.28 billion, led by a 16.8 percent fall in mobile services. Fixed revenues were also down 10 percent to INR 63.67 billion, while the TV business grew by 10 percent to INR 93.69 billion. Airtel said it expects the pain to continue, with a cut in interconnection rates also taking effect this quarter.
The mobile activities in India finished the quarter with 282.047 million customers, up 8.5 percent from a year ago. Quarterly net additions slowed to 1.4 million versus 7 million in the previous quarter, and churn edged up 0.1 point to 3.9 percent. Mobile ARPU was down 23 percent year-on-year and fell 6.3 percent from Q1 to INR 145 due to the intense price competition and promotional activity in response to Jio. Enhanced offers led to a 40 percent annual increase in voice traffic, and data traffic was up 340 percent. Average usage also increased on a sequential basis, by 2.2 percent to 518 minutes per customer and by 56.5 percent to 4.1 GB.
Airtel's results were also hurt by the deconsolidation of its Bangladesh unit after the merger their with Robi Axiata, as well as divestments in Africa. The remaining African activities posted sales up 2 percent at constant currency rates to USD 782 million, and EBITDA improved 41 percent to USD 251 million.
Subscriber growth improved to a net gain of 1.9 million customers in the quarter, to a total 81.927 million in Africa, and ARPU rose to USD 3.2 from USD 3.1 in the previous quarter. Data customers increased by 20.1 percent year-on-year to 21.7 million, and mobile money transactions grew by 31.1 percent to USD 4.9 billion.
Bharti Airtel's capital expenditure jumped to INR 74.85 billion in the quarter from INR 52.88 billion a year ago. While spending in Africa more than halved to INR 3.13 billion, India and South Asia saw a sharp increase to INR 71.71 billion. This led to a fall in operating cash flow (EBITDA - capex) to INR 5.2 billion from INR 41.8 billion a year earlier. Net debt was also up, to INR 914.80 billion from INR 878.40 billion at the end of June, for leverage of 2.91x EBITDA.
