Bharti Airtel Q2 profit drops 29 percent on forex losses
The Indian telco booked a 15th straight quarter of declining profits for the three months to September at 5.12 billion rupees (US$83 million), but sees a bright spot in higher revenue driven by mobile Internet usage.
The world's number 4 telco by number of customers, Bharti Airtel, has booked its 15th consecutive quarter of declining profits.
Despite a 9.9 percent on-year rise in revenue to 213 billion rupees (US$3.4 billion), Airtel suffered a 29 percent drop in net profit at 5.12 billion rupees (US$83 million) largely due to the depreciating rupee, according to a statement on Wednesday.
The weaker currency had led to losses of 3.42 billion rupees in the second quarter ended September, said the telco. The depreciating rupee has also caused a hold back in IT spending and margin pressures for handset makers.
The telco saw a bright spot in higher mobile Internet usage and related revenue. In its domestic market, Airtel noted data usage per customer had risen to 231 MBs from 133 MBs the previous year. This lifted average revenue per user (ARPU) by 15 rupees (US$0.24) to 192 rupees (US$3.12).
According to Forrester analyst Katyayan Gupta, Airtel's performance also indicated a positive sign for the wider Indian telecom industry as rising data usage appetite would translate to higher data ARPU and revenue.
"While the voice ARPU fell by more than 3 percent over Q1 14, the data ARPU rose by more than 11 percent during the same period," noted Gupta."In addition, the number of 3G data customers increased by nearly 18 percent from Q1 14."
"Mobile internet is now a major engine of growth for Airtel across all geographies. Our sustained investment in this segment will further enhance customer experience and seamless coverage," said Sunil Bharti Mittal, chairman of Bharti Airtel.
The telco, which is part-owned by SingTel, operates across 20 countries in Asia and Africa. India is its main market accounting for about 70 percent of its total revenue.