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Informist, Tuesday, Oct. 29, 2024

By Rajesh Gajra

MUMBAI – Bharti Airtel Ltd.'s customer base fell in the quarter ended September as subscribers consolidated their multiple SIM connections after the company announced a significant hike in mobile tariffs in July, the company management said in a post-earnings conference call on Tuesday.

The SIM consolidation was higher in Jul-Sept as against previous quarters. Bharti Airtel's India mobile customer base declined 0.8% on quarter to 351.64 million as of Sept. 30. The effect of the tariff hike was also evident in the revenue from mobile services in India, which rose 10.3% on quarter to INR 248.37 billion in Jul-Sept on the back of a 10.6% jump up in average revenue per user to INR 233. Data usage per customer per month inched up to 23.9 GB in Jul-Sept from 23.7 GB in the previous quarter.

Asked about declining enterprise margins in the last couple of quarters, the management said that the company runs a portfolio of different businesses, each with different margin profiles, where some businesses, particularly on the global side, are facing headwinds. "But there are also places (segments) where growth is much faster... the objective... is to really step up the growth in the business and not worry singularly about margin, but really worry a lot more about absolute profit growth," the management said. The portfolio is being retooled as the company steps up the growth of the businesses, the management said.

To a question whether the land fiber networks being laid out in tier 2 and tier 3 cities were a lot less than anticipated, the management said that the company has continued to roll out fiber connections to homes. "Nothing has stopped there. Ultimately, fiber is the best way to deliver the broadband experience (to users)."

As per the company's blueprint for fiber network expansion, nearly 100,000 kilometers has been covered. The management said that it has significantly increased the use of data science and digital tools across the fiber network to deliver a superior user experience.

Bharti Airtel incurred a capital expenditure of INR 62.6 billion in Jul-Sept on India standalone operations in the quarter ended September, as against a capex of INR 77.9 billion in the same quarter a year ago. This has resulted in Indian standalone capex's proportion to revenue to decline to 19.8% from 28.8%. Asked about whether this drop was due to seasonality or strategic decline in capex intensity going forward, the company management said it had guided earlier itself that 2024-25 (Apr-Mar) will see a moderation in overall capex "and that we stand by." It said that in FY24 the capex was elevated due to "massive rollout of sites" and other factors.

On Monday, Bharti Airtel reported its Jul-Sept earnings. The company's consolidated revenue increased 7.7% on quarter to INR 414.73 billion, while net profit attributable to shareholders of the company rose to INR 35.93 billion from INR 41.60 billion in the previous quarter. Adjusted for exceptional items, the consolidated net profit recorded a rise of 30% on quarter to INR 44.47 billion.

Bharti Hexacom Ltd., a subsidiary of Bharti Airtel, said that its amortisation is expected to flatten off subject to the millimetre waveband, a critical component of the fifth generation wireless network. However, there were no bids placed for this spectrum at the auction in July, following which the government decided to allocate the band at a specific price.

Bharti Hexacom has operations in Rajasthan and northeastern parts of India. Its shares were listed on the bourses in April and the stock closed 2.6% lower at INR 1,425.45 on Tuesday on the National Stock Exchange. On Monday, the company posted an over 50% sequential decline in its net profit for Jul-Sept at INR 2.53 billion. The revenue of the company grew 9.8% on quarter to INR 20.98 billion. The bottomline halved from a quarter ago even as the top line was the highest in five quarters.

Shares of Bharti Airtel ended 1.6% lower on Tuesday at INR 1,637.10 rupees on the National Stock Exchange. End

With inputs from Anjana Antony

Edited by Saji George Titus

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