Agencies
New Delhi, Oct 31: The profits of Bharti Airtel Ltd, one of the top telecom operators in India, plunged 76.5 per cent in Quarter 2 compared with the corresponding period last year as it worked to retain advantage in a price war with Reliance Jio.
Leading players in the sector have also came under further price pressure as the Telecom Regulatory Authority of India earlier this month reduced interconnection Usage Charge, a fee that operators pay each other for calls made from one network to another.
Gopal Vittal, Bharti Airtel’s chief executive for India and South Asia, said in a statement that the financial stress in the industry “continues due to double digit revenue decline and will be further accentuated by the reduction in IUC rates in the next quarter”.
That will eventually lead some operators to either consolidate or exit the market, he added.
Vodafone and Idea Cellular are in the process of combining their operations in India. The merger will potentially create the biggest Indian telecoms company, surpassing Airtel, which recently increased its customer base with its acquisition of the Tata conglomerate’s consumer mobile business.
Airtel’s second quarter net profit of Rs3.43 billion was its smallest profit in 19 quarters and its sixth consecutive drop in quarterly profit. However, it beat analysts’ average estimate of Rs3.03 billion, according to data collected by a news agency.
The revenue of Airtel, which has operations in 17 countries across Asia and Africa, fell 11.7 per cent to Rs217.77 billion. Mobile services revenue in India declined about 17 per cent to Rs122.45 billion.
The shares of the company closed at Rs497.65 apiece, up by 0.98 per cent over the previous close on BSE. The second quarter earnings announcement came in after market hours.
