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Airtel Q3-FY12: India & South Asia Mobile Revenues Up 4%; Non Voice At 14.27%; Telemedia Down 4.2%

A decline in SMS as a percentage of revenues appears to have pushed down the share of non-voice revenues for Bharti Airtel‘s mobile operations in India. Non voice revenues (Data, VAS, SMS) in India declined for yet another quarter to 14.27% of total, down for the third consecutive quarter. Non voice revenues were 14.5% in the previous quarter, 14.6% the quarter before that, and at their peak at 15% for the quarter ending 31st March 2011. SMS as a percentage of mobile revenues declined to 9% from 9.48% the previous quarter. So, for yet another quarter, Airtel’s voice business is being outpaced by its non-voice business.

Last quarter, Airtel had said that it was yet to fully implement the TRAI directive on Activation of VAS Services, which requires the explicit consent of the customer. The quarterly report only states the terms of the TRAI directive, and makes no mention of whether the company has implemented the directive or not. The directive came into effect on August 4, 2011.

Group Financials

The consolidated revenues for the quarter were Rs 18477 crore, up 17.1% over the previous year, and up significantly from Rs 17276 crore the last quarter. India and South Asia revenue increased by 12.1%. EBITDA margins for the quarter were up to 32.2%, and net profit was down to Rs 1011 crore, compared with Rs 1303 crore for the same quarter last fiscal, and marginally lower than the Rs 1027 crore reported last fiscal. This is largely due to the 3G license fee amortisation and high interest costs.

Airtel Mobile KPI’s For India & South Asia

What’s noticeable here is that the net additions in the quarter were as much as 20% less and decreased for the second quarter running. Just two quarters ago, Airtel had reported net additions of 6.98 million, and now net additions are 41% of that, at 2.87 million.

However, there appears to have been a marginal increase in usage – the traffic, in terms of million minutes was up 0.8%, despite average rate per minute increasing by 3.19% to 44.56 paise per minute and minutes of use per user decreasing to 419.32 minutes per month per user. The decline in minutes of use is pertinent since, usually, during the festive season, one sees an increase in usage. Note that monthly churn increased for Airtel to 7.9%. On a positive note, more users were active on Airtel’s network, at 90.02%, compared with 88.6% the previous quarter, and Average Revenue per user (ARPU) increased to Rs 186.85,  undoubtedly helped by the increase in ARPM.

Telemedia & Digital TV

Airtel’s total telemedia customer base declined 0.33%, with a net decline in its customer base by 11 thousand customers. ARPU also declined by 4.07% to Rs 915.86, from Rs 954.75. The landline business isn’t doing well, and Airtel has, for each quarter over the last year, been reporting 1.4 million broadband connections. Not much growth there. Note that the company has reported “non voice revenue” for its Telemedia business, which is 54.82% of total telemedia revenue, but that could be on account of a decline in its Telemedia revenue: Telemedia revenue for Airtel declined by 4.2% to Rs 912.76 crore, while Telemedia EBITDA declined by 15.92% to Rs 354.21 crore.

This quarter: Release | Report | Financials | KPIs

Last quarter: Report | Conference Call

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