The country's largest telecom company Bharti Airtel on Tuesday posted a 76.5 percent plunge in consolidated net profit to Rs. 343 crores for the September quarter, hit by disruptive pricing of newcomer Reliance Jio and the resulting tariff war.
It had posted net profit of Rs. 1,461 crores for the July- September quarter of last fiscal. Airtel's total revenue fell 11.7 percent to Rs. 21,777 crores during the second quarter of 2017-18, from Rs. 24,651.50 crores in the year-ago period.
"The financial stress in the industry continues due to double digit revenue decline and will be further accentuated by the reduction in IUC (Interconnect Usage charges) rates in the next quarter," Gopal Vittal, MD and CEO, India and South Asia, Bharti Airtel said in a statement.
This will eventually force operator consolidation and exits as the industry has witnessed in the recent past, he added.
"Airtel remains committed to its goal of increasing revenue market share in this competitive environment by providing superior customer experience and strategically investing behind building more data capacities," Vittal said.
The consolidated revenues for just-ended quarter, at Rs. 21,777 crores, represented a year on year drop of 10.4 percent (reported drop of 11.7 percent) on an underlying basis (that is adjusted for Africa and Bangladesh divested operating units and tower assets sale), Airtel said.
India revenues for the September quarter at Rs. 16,728 crores have declined by 13 percent over the year ago period, led by mobile drop of 16.8 percent.
"Mobile market continues to experience value erosion and financial stress led by competitive pressures," the company added.
Bharti Airtel along with other established telecom firms has been engaged in a fierce tariff war with Mukesh Ambani controlled Reliance Jio.
Over the past few quarters, Bharti Airtel has been blaming the "pricing disruption" in the Indian telecom market caused by the Jio entry for the declining industry revenues and stress on sector profitability, cash flows and leverage.
The company's consolidated net debt rose to Rs. 91,480 crores against Rs. 87,840 crores in the previous quarter. The company said it had "stepped up" the capex investments in the quarter on the back of data coverage and capacity.
Net debt excluding the deferred payment liabilities to the Telecom Department and finance lease obligations increased by Rs. 2,554 crores sequentially in the quarter, the company added.
Bharti Airtel's net interest costs increased to Rs. 1,905 crores compared to Rs. 1,603 crores in the same quarter last year on account of lower investment income.
"The forex and derivative loss for the quarter was at Rs. 422 crores compared to loss of Rs. 302 crores in the corresponding quarter last year," it said.
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