Indian operator again blames predatory pricing for 72% plunge in profit.
Bharti Airtel on Wednesday reported another dismal set of financial results, as new rival Reliance Jio Infocomm’s aggressive strategy continued to take its toll on revenue and earnings.
The India-based telco’s fiscal fourth quarter revenue fell to 219.35 billion rupees (€3.13 billion) from INR249.60 billion a year earlier. EBITDA fell to INR79.93 billion from INR91.88 billion, while net profit plunged 72% year-on-year to INR3.73 billion.
The fall was driven by the domestic business, where revenue and EBITDA fell year-on-year by 7% and 13% respectively. At Bharti Airtel’s African arm, which reports in U.S. dollars, revenue and EBITDA increased by 2% and 39% respectively.
"The sustained predatory pricing by the new operator has led to a decline in revenue growth for the second quarter in a row," noted Gopal Vittal, CEO of Bharti Airtel’s India and South Asia operation.
Indeed, in the prior quarter, Bharti Airtel reported a 3% fall in revenue and a 54.6% fall in profit. The culprit is Reliance Jio Infocomm, which until mid-April offered free nationwide voice, messaging and data services. Its aggressive strategy resulted in an intense price war, and sparked a wave of consolidation.
"The telecom industry as a whole also witnessed a revenue decline for the first time ever on a full year basis," Vittal said. "The deteriorating health of the industry was compounded by the tsunami of incoming voice traffic from the new operator as a result of which significant investments had to be made just to carry the incoming traffic on our network."
Despite the intense competition, Bharti Airtel’s Indian customer base grew to 273.65 million at the end of March, up from 251.24 million a year earlier.
In Africa, its customer base edged down to 80.06 million from 80.56 million.