Bharti books stable quarter, bolstered by domestic growth

31 Jul 2013

Bharti books stable growth, bolstered by domestic growth

Strong growth in India, prompted by an increase in mobile voice and data traffic combined with stable expansion in Africa and South Asia (Sri Lanka and Bangladesh) operations has led to a 9.2% year-on-year increase in revenues for Bharti Airtel, which booked top line earnings of INR202.64 billion (USD3.36 billion) for the three months ended 30 June 2013. The telco reported EBITDA of INR65.45 billion and pre-tax profits of INR16.13 billion for the period, increasing from INR54.86 billion and INR12.29 billion respectively a year earlier. Tax expenses more than doubled from INR4.54 billion to INR9.68 billion however, leading to a 9.6% decrease in net profits to INR6.89 billion. Bharti’s total subscriber base as at end-June 2013 stood at 274.92 million, of which 190.95 million were Indian mobile users, whilst its African and Asian mobile customers totalled 64.2 million and 8.03 million respectively.

In its domestic market, Bharti booked a 2% annual increase in subscribers, alongside an 8% expansion in blended ARPU to INR200 per month. Monthly voice ARPU grew by 7% to INR166, as average minutes of use per customer per month increased by 5% y-o-y to 455, leading to an 8% annual increase in total traffic to 258.38 billion minutes. Whilst mobile data is an increasingly important aspect of Bharti’s Indian business, non-voice revenues made up just 17.3% (16.3% in June 2012) of the provider’s mobile income in the period under review, broken down as; messaging/value added services (VAS) 8.2% (10.8%), data 7.4% (4.3%), ‘other’ 1.7% (1.2%). Nevertheless, the segment has seen rapid growth: the cellco claimed a total of 46.58 million data users (20% y-o-y), of which 6.80 million (83%) were 3G data subscribers. Average data use per subscriber per month was 203MB (+81%), whilst data ARPU expanded at a slower rate, growing to INR63 per month from INR40 at end-June 2012.

Across its 17 African markets, meanwhile, blended ARPU fell by USD1.0 y-o-y to USD5.5 as a slight increase in per-user data earnings failed to offset a 21% decline in voice ARPU, which stood at USD4.5, compared to USD5.7 a year earlier. Data ARPU inched up to USD1.3 from USD1.2 in the previous quarter (no data was given for the year-ago period), despite a concurrent drop in average data use to 70.2MB from 73.4MB. In its two South Asia markets, Bharti booked a net increase in total ARPU (USD2.9, up 14% y-o-y), driven by increases in mobile voice traffic (10.47 billion minutes, +23%) and voice ARPU (USD2.5, +12%) and further bolstered by limited expansion in the data segment. Annual growth in the mobile data market was strong, although growth on a quarterly basis was poor. The data subscriber base was near-static, reporting net additions of just 2,000 users from the previous quarter, despite a 20% increase compared to June 2012. Consequently, data traffic dipped by 1% quarter-on-quarter to 1.05 billion MB, having expanded from 675 million MB a year earlier, and average data use dropped by 8% to 158MB after increasing from 122MB in June 2012.

India, Bharti Airtel