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Voice And Data Services Help Bharti Airtel Beat Estimates

Bharti Airtel, India's largest telecom operator exceeded estimates made by analysts for the April-June quarter.

India’s largest telecom operator Bharti Airtel on Wednesday exceeded estimates made by analysts for the April-June quarter, with the help of growth in the Voice and data business. Net Profit of the first quarter marked an increment of 10.8% to Rs 1,462 crore. The company’s Total Revenue (TR) was up by 2.35 % at Rs 25,456 crore quarter-on-quarter. On the other hand Ebitda (Earnings Before Interest, Tax, Depreciation and Amortization) growth increased 4.39% to Rs 9,591 crore. The Ebitda margin also increased 37.5% as against 36.8% in the preceding quarter.

Though data realisation continued to fall, expansion in volume could set it off. As against a decline in the preceding quarter, this quarter marked an increase in voice realisation. Growth in revenue earned by India mobile companies increased 2.73% sequentially to Rs 15,052 crore.

In this quarter voice realisation per minute increased 0.7% steady to 33.49 paise, and average realisation per user increased 0.5% to Rs 139, but there was a decline in per minute usage, 0.2% sequentially to 414 minutes. The total minutes people spend on network grew by 2.2% sequentially to 314.8 billion minutes.
While considering data, there is an increasing trend. Data, when calculated as a percentage of mobile revenue grew 23.7% against 23.3% in the preceding quarter. Realisation per MB declined 2.5% to 22.31 paise but on usage of MB basis it marked a growth of 5.2% to 904 MBs.
While compared to the preceding quarter, Financial cost during the quarter increased , 14% to Rs 1,942.4 crore while tax expenses came down 6.5% to Rs 1,008.9 crore. The net debt marked a decline by 7.5% to $6,891 million.
Gopal Vittal, managing director of Bharti for India and South Asia operations said in a statement, “The year has begun well with revenue growth of 10.3% y-o-y and continued revenue market share gains”.

Biggest challenge faced by Bharti On the regulatory front would be the upcoming auctions where the reserve price for the prized 700 MHz spectrum has been fixed at a steep Rs 11,485 crore per MHz. On the other hand, it has strengthened itself on the 4G front by acquiring spectrum in the 1800 MHz band from Videocon Tele communications and 2300 MHz band from Aircel.

While taking the situation into consideration, the company has closed the sale of its operations in Sierra Leone and Burkina Faso to Orange. The Tower Co divestment have been closed and settled in 9 of the 11 countries and in the remaining two countries it will be closed shortly. The net proceeds from all the above divestment’s is approximately $3.25 billion, which would help it to redeem a significant part of its debt. The total debt on account of Africa currently stands at approximately $5.25 billion.

The proceeds of all the sale transactions being in dollar/euro denominations significantly reduced its Forex risks apart from yielding better receipts in rupee terms. In this quarter, due to a 42.1% devaluation of the Nigerian naira, Airtel Bharti had a net Forex loss of Rs 748 crore, which they have classified under exceptional items.

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