Bharti Airtel, India's largest mobile services provider, today reported its lowest profit in four years as demonetisation and intense competition with Reliance Jio hit revenues.
Consolidated net profit in October-December fell 54 percent to Rs. 503.7 crores as against Rs. 1,108.1 crores in the same period a year ago, the company said in a statement.
"The quarter has seen turbulence due to the continued predatory pricing by a new operator," said Gopal Vittal, the CEO of Bharti Airtel. "This 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 the 14 paisa it gets as termination charge for any call from rival network to its customers is "well below cost" and "has resulted in a tsunami of minutes terminating into our network."
Bharti Airtel's revenue fell 3 percent to Rs. 23,363.9 crores in the third quarter of FY2016-17. Mobile data revenue slowed to Rs. 4,049 crores due to "free voice and data offering by a new operator".
Data revenues at Rs. 3,087 crores de-grew by 3 percent. Mobile broadband customers increased by 22 percent. Mobile data revenues now contribute to 22.8 percent of the company's mobile revenues in India as compared to 23.1 percent in the corresponding quarter last year.
Vittal added that at the same time revenue market share of Airtel has crossed a lifetime high of 33 percent.
Airtel said that its India revenues were up by 1.8 percent and that of Africa by 6 percent on year-on-year basis.
"India revenues for third quarter (stood) at Rs. 18,013 crores grew by 1.8 percent year-on-year. Slowdown in mobile revenue growth (was) primarily due to free voice and data offering by a new operator," the statement said.
The Indian arm of Airtel reported 9.3 percent year-on- year increase in customer base to 26.58 crore, close to 14 percent increase in voice call minutes and 28.3 percent increase in data usage.
However, tariff war triggered by Jio, led to 10.4 percent decline in the average revenue per user on its network to Rs. 172 from Rs. 192 during the period under review.
The revenue realisation of Airtel India from a minute long voice call reduced by 12.8 percent on year-on-year basis and from per megabyte of data it reduced by almost one-fourth to 17.97 paise from 23.77 paise a year ago.
In Africa, Airtel saw impact of devaluation of Nigerian currency on year-on-year basis.
The net loss of Airtel Africa business widened to $93 million compared to a loss of $74 million in the corresponding quarter last year.