With total revenues at Rs 59,467 crore, up by 42.1 percent y-o-y for FY11, and India and South Asia revenue growth increasing by 11 percent y-o-y, Bharti Airtel has registered a full year revenue of over $10 billion. Consolidated EBITDA margin for the quarter also showed an improvement at 33.5 percent, from 31.6 percent in Q3 FY11. However, the EBITDA margin decreased by 6.5 percent over the year due to an increase in spectrum charges in India, poor 3G uptake, and lower margins from the operator’s recently-acquired African operations.
“Bharti Airtel exhibited strong performance this year. In India, we have been focusing on building a robust 3G network to meet the increasing data needs of a young population”, said Sunil Bharti Mittal, chairman and MD, Bharti Airtel.
Bharti Airtel’s Q4 FY11 overall customer base stands at 220.9 million, across 19 countries, while its total minutes on network stands at 240.2 billion, up by six percent (13 billion) over Q3 FY11. In India, Bharti Airtel’s total customer base increased to 171,162 in March 2011, from 133,283 in March 2010. However, the operator’s wireless marketshare saw a drop to 20 percent, from 21.8 percent last year. The operator saw an increase of approximately 1,000 net additions, at 9,708 in March 2011, with a 16.3 percent marketshare of net additions.
ARPUs saw a decline to Rs 194 from Rs 220 last fiscal, while minutes per user also declined to 449 from 468 last year. Non-voice revenues saw an increase of 15 percent, as compared to 11.8 percent last year, while monthly churn also decreased slightly to stand at 7.6 percent in March 2011, as compared to 7.8 percent in December 2010. This can be attributed to Bharti’s gaining a number of net additions from MNP. The total port-in number for Airtel stood at 1.57 million while the port-out numbers stood at 1 million. Jagbir Singh’s return to Bharti Airtel as Director – Networks, recently will also stand to boost the operator in the coming months.
NLD minutes in March 2011 increased to 19,542 in March 2011, as compared to 15,875 last year. ILD, however, saw a decrease to 3, 047 minutes in March 2011, as compared to 3,173 in March 2010. This is significant because Bharti Airtel, which recently rebranded itself as airtel, now has operations in 19 countries internationally, the most recent being its Africa operations, started last year, for which it invested $10.7 billion. The drop in ILD minutes only reiterates the operator’s low income margins from its international operations, which together with India and South Asia, saw a drop of 6.5 percent in EBITDA margins, as compared to last year, to stand at 33.6 percent.
Bharti Airtel is also in hot water for its huge 3G investment of Rs 122.95 billion for 13 circles where it won spectrum. So far, the operator has added six lakh 3G subscribers in the 11 circles where it has launched, yet it has not been able to recover significantly on its ROI. Added to this is the increase in spectrum cost to $59 million in India, and the highly price-sensitive, low-ARPU market.
The India market has entered a new phase with 3G. This is expected to improve the non-voice revenues of operators like Bharti that have 3G license. Pressure on ARPU is expected to continue as operator’s pick-up marginal subscribers. The drop in competition levels compared to last year will help ease pressure on margins for Bharti and contain churn going forward”, said Kamlesh Bhatia, principal analyst, Gartner.