“Q1 has seen the least amount of price slide, and there is very little leverage left. Ones who have already have paid for 3G and BWA will find it difficult to sustain by slashing prices,” Sanjay Kapoor, CEO (India and South Asia) for Bharti Airtel, said at a press meet today, while announcing its Q1 results for FY11. Kapoor said that 14 telecom operators cannot sustain for long in the Indian market, and one has already seen that some new operators have slowed down network rollouts. In its earnings release, Airtel also emphasised that CAPEX spends during the quarter were restricted to Rs. 1836 crore due to delays in security clearances for equipment imports, hinting that they’re likely to go up in the future.
Bharti Airtel has reported India and South Asia (consolidated) revenues of Rs. 112,725 million, up from Rs. 104,143 million for the same quarter last year. However, Net Income declined by Rs. 5697 million to Rs. 19,048 million. EBITDA margins declined 37.6%, down from 41.3% from last quarter, as the company reported a 14% decline in EBITDA to Rs. 31,710 million from Rs. 34,106 million for the same quarter last year. Kapoor attributed the Rs 5,797 million decline in net income to an adjustment for spectrum charges (approximately Rs. 1,040 million) which has been stayed by TDSAT, and Rs. 4,240 million owing to foreign exchange rate changes. “If you exclude that, then it’s a small difference, and the margins have been well protected,” he said. Consolidated revenues includ Mobile, Telemedia, Enterprise, Passive Infrastructure and “Others” (including Digital TV) segments. Airtel has adopted IFRS standards for reporting starting April 1st 2010, and additionally, for the first time, reported combined stats for India & South Asia, and Africa separately, albeit only for 23 days in the quarter.
On a consolidated basis, the mobile services segment for India and South Asia reported total revenues of Rs. 88,237 million, up 5% from Rs. 84,301 million, a 5% growth year on year. EBITDA declned 7% to Rs. 31,710 million.
Seychelles Acquisition: $62 million
Bharti Airtel’s board has also approved the 100% acquisition of Telecom Seychelles, which has 57% marketshare in the island nation, and has been operating under the Airtel brand. Interestingly, at the press meet, Manoj Kohli, CEO (International) for Airtel said that this isn’t a related party transaction. The Airtel Seychelles website calls Bharti Enterprises its ‘parent company’. A spokesperson said that Telecom Seychelles was owned by a number of entities, but this isn’t a related party transaction.
The acquisition expands Airtel’s footprint in the Africa region to 16 countries. Telecom Seychelles operates 3G, Fixed Line, ship to shore services satellite telephony, among value added services like VSAT and Gateways for International Traffic.
– 136.62 million mobile connections in India, with 21.5% customer marketshare, and 17.6% of wireless net additions.
– Traffic of 195,197 million minutes, up 12% quarter on quarter and 41% year on year
– Pre-paid customers are 96% of subscriber base
– Monthly curn is up 3.4% to 5.8% from 5.7%
– APRU Rs. 215, down 2% quarter on quarter
– ARPM Rs. 0.45, down 5% quarter on quarter from Rs. 0.47
– Non-Voice revenues is down to 11.6% from 11.8% of revenues
– Access and interconnection charges are 11.3% of total revenues
– License fee is 10.4% of total revenues
– Total Revenues of Rs. 8960 million, up 5% year on year
– EBITDA was up 3938 million up 14%
– 3.15 million wireline customers, up 3% quarter on quarter, of which 42.6% are broadband/internet subscribers.
– 86,000 net additions, up 10% quarter on quarter, but down 15% year on year
– ARPU at Rs. 961 up 3% quarter on quarter, and down 6% year on year
– 32.44 million customers, up 25% quarter on quarter and 38% year on year
Sri Lanka and Bangladesh
– 1.4 million mobile customers in Sri Lanka, across 20 administrative districts
– Over 2.5 million customers in Bangladesh, across 64 districts. Bangladesh has a teledensity of 36%
Africa (23 days of the quarter)
– Airtel had 36.36 million Active customers in Africa
– Total revenues of 9583 million, EBITDA of Rs. 2635 million
– Prepaid customers are 99.3% of the total subscriber base
– ARPU $7.4
– ARPM $0.072
– Average Minutes of use per user: 103
– Monthly Churn: 5.6%
– Non Voice Revenue: 7.9%
– Minutes on Airtel Network 3695 million
– Access and Interconnect charges
Manoj Kohli, CEO (International) for Bharti Airtel, said that the transition from Zain is over. Completely under control of Bharti, and everything has been moved to Nairobi from Zain. The overall integration should be complete by the end of this financial year. Active customers (1 month).