Keysight banner

Airtel revenue analysis shows slow recovery though Jio hikes 4G price

Airtel Africa network and revenueBharti Airtel, the global telecom operator with 383.484 million mobile subscribers in Asia and Africa, has succumbed to pressure from Reliance Jio in the last 12 months.

Interestingly, Reliance Jio, a 4G telecom operator promoted by Mukesh Ambani, has just started its telecom journey. Reliance Jio has grabbed 130 million subscribers in the last 12 months – thanks to predatory data pricing strategy.

The industry assumes that Airtel did not lose its data customers to Reliance Jio. But Bharti Airtel, the largest telecom operator, faced the pressure from Reliance Jio. The increase in the data price of Reliance Jio will positively impact the revenue streams of Airtel. The earlier indication is from Vodafone which announced MNP plans in several key circles.

The strategy of Bharti Airtel was to enhance customer experience by increasing its Capex (capital expenditure) in the last five quarters.

Bharti Airtel – focusing on data business — has increased its Capex from $788 million in September 2016 to $866 million in December 2016 to $568 million in March 2017 to $1,022 million in June 2017 and to $1,163 million in September 2017.

The total number of telecom network towers of Airtel in Asia and Africa was 185,201 in September 2017 against 184,677 in June 2017, 184,255 in March 2017, 182,285 in December 2016 and 185,885 in September 2016.

Airtel said its global employee base has reached 21,589 in September 2017 from 22,437 in June 2017, 22,815 in March 2017, 23,289 in December 2016 and 24,134 in September 2016. Telecom equipment makers absorbed some of its employees as part of the managed service deals.

Total revenues of Airtel reached $3,384 million in September 2017 against $3,407 million in June 2017, $3,270 million in March 2017, $3,450 million in December 2016 and $3,672 million in September 2016. The revenue pattern indicates that Airtel is on its path for revival.

Airtel India’s 13 percent dip in revenue shows that it could not handle pressure from Jio though Jio started charging its 4G subscribers for data use during the July-August-September quarter of 2017.

Airtel network in Asia and Africa achieved 489,690 million minutes in September 2017, 470,623 million minutes in June 2017, 426,199 million minutes in March 2017, 381,011 million minutes in December 2016 and 370,153 million minutes in September 2016 on its network.

EBITDA of Airtel was $1,244 million in September 2017 against $1,214 million in June 2017, $1,191 million in March 2017, $1,267 million in December 2016 and $1,410 million in September 2016. The EBITDA is also indicating about a revival.

The Delhi, India headquartered telecom company has taken cost optimizing measures to improve EBITDA margins.

EBITDA margin of Airtel reached 36.8 percent in September 2017 from 35.6 percent in June 2017, 36.4 percent in March 2017, 36.7 percent in December 2016 and 38.4 percent in September 2016 – indicating recovery of its business.

Bharti Airtel said its EBIT reached $511 million in September 2017 against $464 million in June 2017, $442 million in March 2017, $543 million in December 2016 and $671 million September 2016.

EBIT margin of Airtel reached 15.1 percent in September 2017 against 13.6 percent in June 2017, 13.5 percent in March 2017, 15.7 percent in December 2016 and 18.3 percent in September 2016. Both EBIT and EBIT margins are showing signs of revival.

Profit after tax of Airtel was $53 million in September 2017 against $57 million in June 2017, 56 million in March 2017, $74 in December 2016 and $218 million in September 2016.

Net profit margin of Airtel was 1.6 percent in September 2017, 1.7 percent in June 2017, 1.7 percent in March 2017, 2.2 percent in December 2016 and 5.9 percent in September 2016. Improvement in both profit and profit margin will depend on its future investments and financial conditions in the telecom market.

Net debt of Airtel reached $14,012 million in September 2017 against $13,602 million in June 2017, $14,094 million in March 2017, $14,339 million in December 2016 and $12,232 million in September 2016.

Airtel said return of capital employed reached 5.1 percent in September 2017 against 5.6 percent in June 2017, 6.6 percent in March 2017, 7.1 percent in December 2016 and 7.4 percent in September 2016. Airtel is actively looking at enhancing return of capital.

Total customer base of Airtel in Africa and Asia reached 383.484 million in September 2017 from 363.088 in September 2016.

Airtel India

Airtel India’s total revenues reached INR 167,282 million in September 2017 from INR 192,188 million in September 2016, registering a drop of 13 percent.

EBITDA of Airtel India reached INR 63,241 million in September 2017 from INR 82,206 million in September 2016, clocking 23 percent drop.

EBIT of Airtel India was INR 24,938 million in September 2017 against INR 45,208 million in September 2016, registering a decrease of 45 percent.

Capex of Airtel India reached INR 71,440 million in September 2017 from INR 45,804 million in September 2016, achieving a growth of 56 percent.

ARPU of Airtel India fell to Rs 145 ($ 2.2) in September 2017 from 154 June 2017 and Rs 188 in September 2016.

Data customer base of Airtel India increased to 65.769 million in September 2017 from 62.659 million in September 2016.

Total MBs on the Airtel India data network were 783,809 million MBs from 178,125 million MBs, clocking a growth of 340 percent.

Data Usage per customer rose to 4,087 MBs from 1,000 MBs, registering 308.7 percent growth.

Minutes on the network were 437,142 million against 313,403 million, registering an increase of 39.5 percent. Voice Usage per customer of Airtel reached 518 507 million against 406 million, achieving a growth of 27.7 percent.

Airtel Africa’s total revenues were $782 million against $762 million, showing a growth of 3 percent in Q2.

Airtel Africa achieved EBITDA of $251 million (+42 percent), EBIT of $123 million (+592 percent) and
Capex of $50 million (–52 percent).

Baburajan K

airtel telecomblog 720×90