Rebranding, rupee fluctuation and debt repayment take a toll on the bottom line
Bharti Airtel reported consolidated revenues of about Rs 15,760 crore for the quarter ended December 2010, up about 3.5 per cent sequentially, but slightly below expectations.
The rebranding added around Rs 340 crore as one-off expenses and pulled down earnings before interest, tax, depreciation and amortisation margins by 210 basis points sequentially to 31.6 per cent, with operating income dipping almost three per cent.
The company said it repaid debt of $415 million taken for the rollout of third-generation mobile services. Net profit dipped nearly 27 per cent sequentially to Rs 1,213 crore, pulled down by foreign exchange translation losses of Rs 342 crore and a steep increase in minority interest outflow to Rs 90 crore as against Rs 2 crore in the September quarter.
The domestic mobile customer base grew 6.4 per cent sequentially. But the market share shrank 50 basis points to 20.3 per cent, even as the monthly churn was up nearly 200 basis points sequentially to 7.8 per cent. Rates were stable, with average rate per minute at 44 paise. Most operational parameters showed signs of consolidation or bottoming out, with slower rates of decline.
Minutes of use per user fell one per cent sequentially to 449 minutes, as compared to a 5.5 per cent sequential drop in the previous quarter. The average revenue per user slipped by less than two per cent sequentially to Rs 198 compared to over six per cent fall in the September quarter. The Africa operations continued to grow steadily, with customer base expanding five per cent sequentially to over 42 million.
The management reiterated its earlier capex guidance of $1.8-2 billion for India, including 3G (excluding passive infrastructure), and $800 million for Africa. While it expects the company to be net accretive after the implementation of number portability, given the strong network, distribution and customer service capabilities, the rate pressure in the post-paid segment is expected to pinch.
