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Airtel Q4 FY12: Data & VAS Revenues Up 12% QoQ; Enterprise Down 6%; Telemedia Flounders

The spotlight is clearly on India’s largest telecom operator Bharti Airtel, as the country and the sector grapples with uncertainty around the future of new telecom operators and the 2G spectrum auctions, concerns around refarming of spectrum, among several other issues facing the sector.

The company reported total revenues of Rs 18729 crore for the quarter, up 15% year on year, India and South Asia revenues of Rs 13421 crore, up 10.5% year on year. Its consolidated EBITDA was Rs 6,233 crore, up by 13.7% year on year, with EBITDA margin at 33.3%. Net profit for the quarter was 1,401 crore; For the fiscal, Airtel reported Rs 1,006 crore in Net profit, impacted by by higher costs on account of 3G license fee amortisation of Rs 106 crore, 3G interest costs of Rs 84 crore, forex fluctuation losses of Rs 132 crore and tax provisions of Rs 198 crore.

India Mobile: Data & VAS segment grows

India Mobile: India mobile revenues increased grew 6.8% to Rs 10509 crore. Mobile EBITDA for India grew to Rs 3571.9 crore, up 6.26% year on year, and 3.74% quarter on quarter.

Data & VAS

Note: We’ve taken revenues for India and South Asia for our calculations, since Bharti Airtel does not break out numbers for India separately. Do keep in mind that the non India component of Bharti Airtel’s “India and South Asia” revenues is likely to be relatively small, since it includes Sri Lanka and Bangladesh. Airtel has 6.72 million connections in Sri Lanka and Bangladesh, as compared to 181.27 million in India. The calculations below need to be read as approximations. 

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As per MediaNama’s calculations, Data and VAS accounted for Rs 599.05 crore for the quarter, up 12.17% quarter on quarter. This means that Data and VAS was 5.7% of total revenue for Airtel (up from 5.25% last quarter), and 39.58% of non voice revenues (up from 36.77% last quarter). SMS revenue declined 0.44% to Rs 914.34 crore, but it still remains almost 60% of the companys non voice revenues. Non voice revenues grew 4.19% to Rs 1513.38 crore. Our calculation:

Airtel Mobile KPI’s For India

A few things noticeable here:

– An increase in the VLR percentage for the quarter, which puts Airtel in the 91% bracket, on par with Idea Cellular. Together these two companies have the highest percentages of active users in the Indian market. On Q2, the VLR numbers were at around 88%, so this is a significant improvement.
– Recovery of net additions: Airtel had reported abysmally low net additions for the third quarter, at 2.87 million, probably its lowest in years.
– Increase in traffic:  more minutes of use, and higher minutes of use per user resulted in an increase in revenue
– Decline in Rate per minute: This is unexpected, since telecom operates have taken a rate hike over the last few quarters.
– Increase in churn: this is just after the 2G verdict announcement by India’s supreme court. One would have expected churn to decline, and for customers to port in to Airtel from other new telecom operators.

Telemedia & Digital TV

Airtel’s Telemedia business is floundering – the revenues have been flat quarter on quarter, despite an increase in ARPU to Rs 933 from Rs 915.86, and the customer base continues to decline. At the same time, Telemedia EBITDA increased to Rs 375 .4 crore from Rs 354.21 crore, reversing the decline. Airtel has provided insufficient updates on its broadband customer base in its quarterly reports: “around 1.4 million” is what we have read in each quarter over the last year or so.

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