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Bharti Airtel's June quarter numbers, which beat estimates, show the telecom sector is out of the woods. Be it customer additions, minutes on the network or margins, Bharti Airtel has fared well on all counts in the first quarter of FY15. The share of non-voice revenues is improving steadily, on higher data consumption. However, the beat in earnings has been driven by the India business. The Africa business continues to witness a dip in customer additions and margins.
Bharti's consolidated sales have grown by 13.3 per cent year-on-year (y-o-y) to Rs 22,962 crore against the Street's estimate of Rs 22,626 crore. Revenues from the India mobility business rose 10 per cent to Rs 12,752 crore, while Africa have grown by 17 per cent y-o-y in rupee terms to Rs 6,968 crore. In dollar terms, Africa revenues have grown only 10 per cent.
Total number of minutes during the quarter, too, rose two per cent sequentially to 270 billion minutes during the quarter. Realisations per minute in the India mobility business improved during the quarter to 38.08 paise from 37.16 paise in the March quarter and 36.60 in the year-ago quarter. Average revenue per user remained flat compared to the year-ago period, but has improved by two per cent sequentially to Rs 166. Voice usage has remained flat sequentially, but has declined four per cent y-o-y to 435 minutes.
Bharti's Africa business has not shown any improvement sequentially. While customer base dropped one per cent to 69 million, minutes on the network remained constant. Africa margins declined 100 bps sequentially to 24.3 per cent.
Data, however, is the big story that is playing out. While share of messaging and value-added services in sales is declining, data as a percentage of sales in Q1 was at 12.4 per cent, up from 8.3 per cent last year. The story is the same in Africa where minutes on the network are not growing but share of data in overall revenues have increased to 8.8 per cent in June 2014 from 5.4 per cent last year.
