Bharti Airtel has reported a net profit of Rs. 25, 167 million, up 24 percent from Rs. 20,250 million reported for the same quarter last year. Consolidated revenues grew to Rs. 99,416 million for the quarter, up 17 percent year on year from Rs. 84,883 reported for Q1 last fiscal.
Deputy CEO Sanjay Kapoor said that the mobile business is going through a hypercompetive phase, and the company feels that its focus on building a “minutes factory” is coming through now. They grew their minutes traffic by 10.1 billion minutes this quarter, at 7.7 percent.
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The key area of focus for Bharti Airtel is Rural now: Kapoor said that about 54% of their new customers come from Rural India. “That’s the route to go, and the business model has been attuned to service the customer in that fashion -whether we’ve got the right partners, or the collection process,” Kapoor said. Consolidated EBITDA margins increased for the quarter to 41.8 percent, from 41 percent last quarter.
During the quarter, Airtel’s mobile subscriber base grew to 102,368,000 from 93,923,000, up 9 percent quarter on quarter, and a 48 percent growth year on year. This growth is in line with the growth in India’s subscriber base.
With the increase in traffic, Airtel’s ARPU has dropped significantly from Rs 305 last quarter to Rs 278 in Q1-10. During the conference call, the management said that there are a large number of free minutes floating around, so there is some churn at the lower level. More importantly, though, the reduction has largely been faciliated by a reduction in mobile termination rates by 10 paise. This settlement is between operators, and “there’s no scope of passing this on to customers”. The management contested the notion that this could be due greater addition of (lower ARPU) rural subscribers.
The growth in Telemedia services (DTH, Broadband and IPTV) hasn’t still taken off, growing just 4 percent quarter on quarter to 2,828,000 subscribers at the end of June, up from 2,726,000 at the end of March. B2B is a significant part of the Telemedia business, where the company says there was some weakness. Airtel has 1.14 million DSL customers, and around 40.3 percent of their fixed line customers are DSL (broadband) customers. Note that Telemedia numbers do not include DTH numbers, which the company did not comment on.
Sri Lanka: Kapoor said that the company is now getting the dominant share of the new ads in Sri Lanka.
We’ll update with more inputs from the management, and charts on performance.