Bharti Airtel Q1 profit rises 40% on higher data usage, tower sales
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New Delhi: Bharti Airtel Ltd’s first quarter (Q1) profit rose 40%, beating analysts’ estimates, on higher data usage by subscribers and the sale of some of its tower assets in Africa.
Net profit at India’s biggest telecom company rose to Rs.1,554 crore in the quarter ended 30 June from Rs.1,108 crore in the year earlier. Profit was boosted by a one-time gain of Rs.458 crore from the sale of tower assets in four African countries for about $1.3 billion (around Rs.8,300 crore today).
Total revenue grew 3.1% to Rs.23,671 crore from Rs.22,962 crore on significantly higher data usage. Mobile data revenue increased 56.9% to Rs.3,458.6 crore. A survey of 25 analysts by Bloomberg expected the firm to report revenue of Rs.23,332.9 crore, while 23 analysts expected profit at Rs.1,410 crore.
“Mobile data revenues now represent 14.6% of the total revenues as compared with 9.6% in the corresponding quarter last year,” Bharti Airtel said in its report on the earnings for the quarter.
Mobile data revenue from India rose 67.3% to Rs.2,609 crore from a year earlier as the number of data customers rose 25.8% to 49.4 million. The number of 3G customers grew 70% to 21.3 million. Data usage grew 83% to more than 102 million megabytes (MB), while data usage per customer rose 43% to 706 MB. The average data revenue per user increased by Rs.42, or 30%, to Rs.181 in the quarter. Data revenue now accounts for 19.2% of India mobile revenue as compared with 12.4% in the year-ago period.
“They had a one-off tower sale, without which they would have shown a drop in net profit of 7-8%,” said a Mumbai-based telecom analyst with a multinational brokerage, declining to be identified. “What is good is that they are spending more of their capex on 3G and 4G than others. They are well positioned for the data growth story versus others who are still investing in 2G.”
The profit increase came despite net interest cost rising 73.6% to Rs.1,139 crore, and forex and derivative losses more than doubling to Rs.780 crore from Rs.301 crore in the year earlier.
The company’s core voice business, however, continued to disappoint. While total minutes went up 7% to 290.8 million, average revenue per user fell 11% to Rs.148. The voice realization per minute, an indicator of the margin of profitability, fell 8% to 34.93 paise.
Bharti Airtel’s Africa numbers were also disappointing. Revenue from the 17 countries in the continent fell 11% to Rs.6,159.5 crore. The company, however, said that at constant currency levels, the Africa operations grew 1% from a year earlier. Data revenue in Africa, however, showed promise, growing 48.5% from a year earlier to $128 million, Bharti Airtel said.
The company ended the quarter with a net debt of Rs.68,134 crore, compared with Rs.60,697 crore in the year-ago quarter.