India’s Bharti Airtel swings to profit with strong 4G user growth

Bharti Airtel 4G profit
Image by Zdeneksasek |

Bharti Airtel, India’s second-largest telecom operator, has posted a net profit of Rs 854 crore ($116.99 million) in the third quarter or the October-December 2020 period after six straight quarters of losses, driven by strong 4G and postpaid subscriber growth. It had reported a net loss of Rs 1,035 crore ($141.78 million) in the previous year’s corresponding period.

Gopal Vittal, MD and CEO, India & South Asia, said that despite the unprecedented volatility that the telco confronted through the year, it delivered another strong performance this quarter. 

“This consistency in performance was across every part of our portfolio, as reflected in market share growth across all our business segments. This has been made possible due to our agility, the continued re-orientation of our business model and our relentless focus on what truly matters – serving our customers,” Vittal said in a statement. “Online recharges continue to contribute around 50% of overall revenues.”

The telco’s net profit was also helped by a one-time gain of Rs1151.7 crore ($157.77 million) from Bharti Infratel and Indus Tower’s recent merger.

However, it reported a net loss of Rs 298 crore ($40.82 million) before exceptional items like one-time gain that it narrowed from Rs 763 crore ($104.52 million) net loss in the July-September period.

However, Airtel added that its profit was dragged by a 32% year-on-year rise in net finance costs, largely due to higher forex losses partially offset by lower interest on borrowings.

The telco reported its highest ever consolidated quarterly revenues of Rs 26,518 crore ($3.63 billion), up 24.2% year-on-year. In comparison, the India business witnessed the highest ever quarterly revenues of Rs 19,007 crore ($2.6 billion), up 25.1% year-on-year. 

The Sunil Mittal-led telecom operator continued its subscriber growth in the quarter and added 13 million 4G customers to its wireless business, which helped its overall revenues grow by 25% over the same period last year and margins expanded. 

Airtel’s 4G data customers increased by 33.8% to reach 165.6 million compared to the previous year. Over the last 4 quarters, the company has added over 42 million 4G customers to its network. 

The Sunil Mittal-led telco ended the quarter with nearly 308 million wireless users in India compared to Reliance Jio’s 410.8 million users.

Airtel’s average revenue per user (ARPU) continues to be the best in the industry at Rs 166 ($2.28) in the third quarter, up from Rs 162 ($2.22) in the previous quarter. Its average data usage per data customer was 16.4GBs per month while voice usage was at 1,027 mins per customer per month. 

The telco faced intense competition from Reliance Jio and various legal and statutory issues including the AGR payments issue. In October last year, the telco got a relief from India’s Supreme Court, which allowed it to clear AGR dues in 10 yearly instalments starting 2022. 

During the quarter, Bharti Airtel filed an application in the Supreme Court highlighting basic arithmetical, clerical and computational errors in the DoT demand related to the AGR dues. “The application is pending adjudication,” it added.

Reliance Jio Infocomm, which is currently the market leader in terms of subscribers, last month reported a net profit of Rs 3,291 crore ($2.6 billion). However, Jio’s ARPU was Rs 151 ($2.07) compared to Airtel’s Rs 166.

Airtel specifically mentioned growth in its post-paid wireless business where it added over 700,000 new customers during the quarter. 

“We continue to invest ahead of the curve to create capacities and provide a brilliant experience to our customers. Several initiatives have also been undertaken to improve Network quality – leveraging digital tools/probes to monitor and improve customer experience, scaling up Vo-Wi-Fi adoption to improve indoor experience,” Vittal said.

Airtel now has over 18 million customers using its voice over Wi-Fi or VoWi-Fi service.

The telco’s home broadband business also witnessed a revenue growth of 2.3% year-on-year with highest ever customer additions of 2,15, 000 during the quarter to reach a total base of 2.79 million. It has been growing its broadband network with the help of local cable operators or LCO in cities where deploying new fiber is challenging. 

“We re-calibrated our offering and launched Xstream bundles with content and unlimited internet to accelerate penetration,” Vittal said, adding that the LCO partnership model helped the telco expand its footprint in non-wired cities, extending the model to over 120 cities.

Airtel said that its enterprise business continued to accelerate its momentum with 9.2% year-on-year growth in the quarter, driven by demand for connectivity and solutions across global business and domestic businesses. It is focusing on adjacent verticals such as Data centres, Cloud, Cybersecurity, Customer relationship management platforms and video-conferencing.

Be the first to comment

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.