Bharti Airtel Q2 Profit Jumps on Mobile Data Surge

Bharti Airtel Q2 Profit Jumps on Mobile Data Surge
Bharti Airtel Ltd, India's top mobile carrier by subscribers, posted a 10 percent rise in quarterly net profit that beat estimates, helped by a surge in data usage by customers.

A rapid proliferation of smartphones, led by Chinese brands, has prompted Indian users to use their handsets to access the Internet and demand faster downloads, which are typical of 4G services.

India is also seeing unprecedented demand for fast data as its booming startup industry leans heavily on stable internet connections to get customers.

"With the commercial launch of high speed 4G services across 334 towns and roll-out of 3G services... we are now best positioned in the industry to leverage the fast growing data market," Gopal Vittal, chief executive of Airtel's India & South Asia unit, said in a statement.

Bharti Airtel has been in the lead in bringing fourth generation data services to customers in India, ramping up coverage ahead of rival Reliance Jio, the telecommunications unit of cash-rich conglomerate Reliance Industries Ltd's, 4G services launch.

In August, Airtel said it would price its 4G services at existing 3G costs, and the carrier is allowing some users to migrate to 4G for free.

These efforts have helped Airtel add more subscribers than rivals in the months of July and August.

Airtel, however, saw a drag from falling voice call charges, same as rival Idea Cellular did last week.

As voice calls get cheaper, telecommunications carriers in India are focussing on building their data service networks to cater an increasing number of customers who prefer using apps to calling.

Average revenue per user for voice calls, a key measure of telecom health, dropped to Rs. 140 from Rs. 158 same quarter last year for Airtel.

Average revenue per user from data rose to Rs. 193 in the quarter, up from Rs. 150 a year earlier.

Bharti Airtel, headed by Indian billionaire Sunil Mittal, said net profit for the quarter ended September 30 rose to Rs. 1,523 crores ($234.4 million), up from Rs. 1,383 crores a year earlier.

Analysts on average expected the company to post a net profit of Rs. 1,150 crores, according to Thomson Reuters data.

Total revenue rose 4 percent to Rs. 23,836 crores for the second quarter from a year earlier. Mobile data revenue grew 60 percent during the quarter.

© Thomson Reuters 2015


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