Covid puts financial stress but expecting recovery soon: Airtel CEO

Bharti Airtel is experiencing financial pressures in the second wave of the COVID-19 pandemic, but expects the recovery to start soon, a top company official said on Tuesday.

Bharti Airtel MD and CEO for India and South Asia Gopal Vittal said he has also lost 13 colleagues due to the COVID-19 pandemic.

"We are seeing some impact of the second wave of COVID. The impact is both psychological and emotional, which is related to fear and insecurity among customers.

The second impact is financial pressures as migrants go back to the villages where incomes and livelihood have been destroyed. Some of them are consolidating their SIMs, using one SIM between their family," Vittal said during the company's earnings call.

 

There is also an impact is on customer acquisition because of reduced walk-ins in the stores, he added.

"All of this we have seen. We also saw a sharp recovery in June. 90 per cent of India is under lockdown and 10 per cent is under night lockdown or weekend lockdown.

We are operating in the lockdown situation. Given the softness that we have seen in the month of April, we are preparing for financial recovery as we see the market opening up. We saw that strongly coming though in June of last year," Vittal said.

Bharti Airtel has reported a consolidated net profit of Rs 759 crore in the fourth quarter of the fiscal ended March 2021 and crossed Rs 1 lakh crore annual revenue mark for the first time.

The company had posted a loss of Rs 5,237 crore a year ago.

The consolidated revenue of Bharti Airtel increased by 11.9 per cent to Rs 25,747 crore during the reported quarter compared to Rs 23,019 crore it posted in the corresponding quarter of 2019-20.

India revenue of Bharti Airtel increased 10 per cent during the quarter to 18,337.8 crore from Rs 16,734.3 crore a year ago.

The mobile services business of Bharti Airtel grew by 9 per cent to Rs 14,079.7 crore during the period under review.

Airtel posted a decline of 5.8 per cent average revenue per user (ARPU) to Rs 145 in January-March 2021 from Rs 154 in the year-ago period.

"In this (reported) quarter, we have restated our numbers, and in particular ARPU, given the abolition of the IUC regime. To make the ARPU definition even more stringent, we have eliminated the interconnect revenue as also the inter-licence settlement between the circles. What it therefore means is that ARPU is now a true measure of customer revenue of the mobile business only," Vittal said.

Airtel recorded the highest ever net addition of around 2.74 lakh customers in-home services business in January-March quarter.

Vittal said that the company expects to cover around 2-2.5 crore homes through network rollout in the next couple of years.

The company has a lot of scope to grow in the enterprise segment, he added.

"We have moved market share from 23 to 31 per cent in 2 year period. Given 80 per cent of our business comes from 20 per cent of our customers. There is real headroom here to grow our market share and move beyond 31 per cent. Another opportunity is beyond connectivity and that is another Rs 50,000 crore opportunity. There is cloud communication business, second business is cybersecurity, Vittal said.

The company sees the internet of thing platform as another promising area for growth in the next 5-7 years.

He said that 5G auctions were expected by the end of this year, but it may get delayed for few months.