Financial performance analysis of telecom operators in India in Q1 2011-12





Bharti Airtel has once more emerged as the number one telecom operator in India, with revenues amounting to Rs 13,229 crore for the quarter ending June 2011. According to newly released TRAI figures, Bharti has retained the highest spot among the top 15 wireless operators in the country, based on revenue.





However, the telco’s net profits saw a fall of 28 percent in the same quarter, registering profits of Rs 1,215 crore for Q1, as compared to Rs 1,681 crore in Q1 last year. The decline in net profit was due to increase in net interest outgo ($333 million), forex restatement losses ($152 million), re-branding expenses ($76 million) and increase in spectrum charges in India ($59 million).





The consolidated EBITDA margin for the year, as reported in the last quarter also declined by 6.5 percent over the previous year, which was attributable to pricing pressure in India and South Asia and the lower margins in African operations acquired during the year, according to a statement released by the operator earlier this month.





Bharti Airtel has most recently upped its prepaid voice tariffs in India by 20 percent – the second operator to do so after Tata DOCOMO, which had started the trend in July. It is assumed that measures such as this – to increase ARPUs, as well the recent restructuring that the company underwent, has assisted it to improve margins.





Meanwhile, Vodafone has once again beaten PSU operator, BSNL to become number 2 service provider in the country, with revenues of Rs 7,850 crore in Q2. Vodafone said in July that it had over 500,000 3G subscribers in the country that was growing daily.





BSNL in number three position has once again witnessed a drop in revenues from Rs 7208 crore for the quarter ending March 2011, to Rs 7139 crore in the quarter ending June 2011.





BSNL and MTNL did not raise prepaid wireless tariffs recently, in the hope that this will attract more customers to their fold. Besides various new schemes and attractive offers for its services, BSNL announced that it was the number one 3G operator in the country, with 3.4 million 3G users, as of July 2011 – contrary to media reports that said it had failed to attract significant 3G customers, despite its first-mover advantage two years ago.





Last month, BSNL also launched VVoIP calls for the first time in India at rates ranging from as low as 40 paise for audio calls and Rs 2 per minute for video calls within the country. As part of this service, VoIP audio calls to international destinations are also priced between Rs 1.20-Rs 7.20 per minute.





Idea Cellular at number four according to TRAI’s latest data pegged revenues of Rs 5,236 crore for the quarter ending June 2011, showing a 6.7 percent growth in revenues since the last quarter. Idea Cellular has been one of the biggest gainers in MNP, besides expanding its 3G network to 10 major cities and 100 other towns in the Maharashtra and Goa circle. Idea has approximately 5 lakh 3G subscribers in Goa and Maharashtra, and is the most preferred 3G network in the circle. It’s time-based usage 3G plan, which is similar to that offered by Airtel, but at lower rates, have allowed many subscribers to try out 3G on its network.





The fifth operator in the country, based on revenues is Reliance Communications. The operator recorded revenues of Rs 4,214 crore, for the June quarter, witnessing a 4 percent dip in revenues and 37 percent fall in net profits, as compared to the last quarter. However, recent changes to the operator’s internal team, as well as the launch of the only 3G-enabled tablet in the country, at a price of Rs 12,999, has helped it see some improvements in its revenue margin. The fifth operator in the country to raise prepaid mobile tariffs in the country by 20 percent, RCom hopes that this will help it recover falling ARPUs. RCom also recently hired UBS to dispose of its stake in Reliance Infratel for $5 billion.





TTSL has grabbed sixth place, among the top 10 operators in the country, based on revenue. For the quarter ending June 2011, TTSL reported revenues of Rs 4,047 crore. Tata DOCOMO was the first operator in the country to raise prepaid mobile tariffs by 57 percent, doubling the famous ‘per-second billing’ that it started to 2 paise per second in some circles. The company also recently announced its plans to break ties with MVNO alliance, Virgin Mobile, which rents spectrum from TTSL in some circles. This move was part of company restructuring, to use Virgin’s spectrum to expand the services of GSM arm, Tata DOCOMO.





Aircel comes in at seventh place, clocking revenues of Rs 1,869 crore for the June quarter, as compared to Rs 1,747 crore, in the quarter ending March 2011. Last year, the operator’s revenues grew by 44 percent over 2009 and the incremental revenue market share grew by 19 percent. The telco which recently launched 3G services in Punjab, was also the first operator in the country to set up a 3G experience zone in November 2010. Aircel was also the first private operator to tie up with Apple to bring the iPhone 4 to India.  





State-run operator, MTNL is in eight place once again, with recorded revenues pegged at Rs 913 crore in the June quarter, according to TRAI. This shows a decline of Rs 30.4 crore, from its last quarter earnings of Rs 944 crore. The troubled telecom PSU, recently announced attractive voice tariffs of 1 paise per 4 seconds in Delhi and Mumbai circles, at a time when other private operators have increased their prepaid voice and SMS tariffs by 20 percent.





Recently, it has also launched push mail services in Delhi, similar to Blackberry, in association with Bharat Berry. It also launched mobile TV for its 2G and 3G subscribers, and earlier announced at a press conference in the capital that its existing mobile users in Delhi and Mumbai will have an option to choose its 3G services without official migration and incurring additional cost, providing it with an opportunity to become the number one 3G operator in the country. Besides, MTNL is the only 3G service provider in India offering Truly Unlimited 3G data Plans without any data or speed cap. In January, 2011 the operator introduced “Advance Rental Unlimited 3G Data Plan” and with the Plan-4500 further extended till August. The effective cost of Unlimited 3G Data Downloads will be as low as Rs. 750/month. However, its 2G and 3G services still suffer from erratic coverage in both its circles of operation.





In ninth place, Unitech Wireless has reported revenues of Rs 539 crore, a substantial increase over its revenues of Rs 403 crore in the quarter ending March 2011. While greenfield operator, Uninor recently reported that it had crossed the 25 million subscriber mark in India, it also slashed its STD rates last month to as low as 30 paise per minute, as well as discounts of up to 96 percent on local calls between two Uninor subscribers in Mumbai, as part of its Dynamic Pricing product.





SSTL is in 10th place with revenues standing at Rs 279 for the June quarter, as compared to Rs 237 crore in the March quarter. The telco’s extraordinary performance has helped it overtake Tulip Telecom, which was in 10th place in the March quarter, reporting revenues of Rs 276 crore, as compared to revenues of Rs 184 core in the June quarter, which has dragged it down to 13th place. SSTL, which operates under the brand MTS in India, launched free calls within the MTS network for its subscribers in Maharashtra and Goa, as well as special student discounts.





The other operators which have made it to the Top 15, based on revenues, are Videocon in 11th place, with revenues of Rs 195 crore, as compared to Rs 189 crore in the March quarter. Loop Mobile has come up one spot to 12th position, from 13th position in the last analysis, with reported revenues of Rs 186 crore for the quarter ending June 2011, as compared to Rs 185 crore in the last quarter. As mentioned earlier, Tulip Telecom comes in at number 13, with revenues of Rs 184 crore, as compared to Rs 276 crore in the last quarter. Holding 14th place is Verizon, which reported revenues of Rs 123 crore in the June quarter, as compared to Rs 119 in the March quarter. Finally, BT has slipped one place from number 14 to 15, with a fall in revenues from Rs 154 crore in the March quarter to Rs 122 crore in the quarter ending June 2011.





Mobile operators are in the process of increasing their wireless tariffs to improve margins. During the forthcoming festival, they expect huge demand for devices and 3G services.






By Beryl M
[email protected]