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India’s biggest mobile operator reports 3% decline in revenue, blames Jio’s ‘predatory pricing’.

Bharti Airtel on Tuesday reported a 54.6% fall in fiscal third quarter profit, as the price war sparked by Reliance Jio Infocomm’s aggressive tactics weighed on revenue.

India’s biggest operator generated group revenue of 233.36 billion rupees (€3.19 billion) during the three months to 31 December 2016, down 3% on the same quarter a year ago. Net profit fell to INR5.04 billion from INR11.08 billion.

Bharti Airtel’s domestic revenues inched up 0.86% year-on-year to INR182.39 billion. By comparison, in the prior quarter the growth rate was 10.03%. Bharti Airtel blamed the slowdown on Jio’s offer of free nationwide voice and data services.

Jio stunned the market when it launched free services on 5 September. It has pledged to continue to do so until the end of March, after which it is reportedly planning to introduce a nominal fee of INR100 per month for data.

Jio has also come to blows with rival operators, which have complained that their points of interconnection (POIs) have been flooded with inbound voice traffic from Jio customers availing themselves of the free calls.

"The quarter has seen turbulence due to the continued predatory pricing by a new operator," said Gopal Vittal, CEO of Bharti Airtel’s India and South Asia business.

The "tsunami of minutes" terminating on Bharti Airtel’s network "has led to an unprecedented year-on-year revenue decline for the industry, pressure on margins, and a serious impact on the financial health of the sector," he said.

Despite the difficulties, Bharti Airtel still managed to grow its Indian customer base to 265.85 million from 243.29 million a year ago.

Elsewhere, Bharti Airtel’s revenue in Africa fell INR53.56 billion from INR62.51 billion, while its customer base fell to 80.36 million from 82.07 million.

Nevertheless, " Underlying Africa revenue growth for the quarter accelerated to 6.0 Y-o-Y, the highest in the last nine quarters," said Raghunath Mandava, Bharti Airtel’s Africa CEO. "Our efforts to improve the quality of customer acquisitions have resulted in a reduction in customer churn to 4.9% from 6%."

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