Airtel Suffered A Total Net Loss Of Rs 2,866 For The First Quarter

On August 1, Airtel, a major mobile operator in India, made an announcement about its enormous total amount of net loss, which accounts for Rs 2,866 crore, in the 1st quarter that ends in June. This loss was mainly a result of Rs-1,445-crore one-time hit. The loss could be due to the cheap data plans in India. 

The fact that India’s third-biggest telecom firm based on the number of subscribers suffered from such a huge loss has a bad effect on the possibility of reviving a sector bruised and battered by Reliance Jio's heightened competition for the share of market revenue and subscriber.

Through a statement, the firm’s representative stated that after officially using IndAS 116 from April 2019, the ratios and results for this quarter mentioned above are much worse than previous periods.

The year-on-year growth rate of the Indian wireless industry revenue was 4.1 percent, to Rs 10,724 crore.

Presently, mobile operators are all in loss, which is caused by their tariff fights with Reliance Jio. The telecom company offers users with free voice calls and ultra-cheap packages of data right when entering the mobile market. Here are all of the current top-up plans of Airtel Smartbytes.

According to Airtel, in the first half of this year, its exceptional Rs-1,445-crore hit was mainly a result of the Rs-142-crore fee to compensate for 3G network equipment's depreciation and network up-gradation and re-farming program costs. This is also due to the Rs-1,586-crore incremental provision of derivative financial obligations related to customary indemnities sent to Airtel Africa's investors, listing expenses, and many others.

However, considering the benefits from net tax and ex-parte judgment, India’s telecom industry still witnessed some financial benefits from levies’ re-assessment.

Before the merger of Vodafone Idea in 2018, the biggest telecom firm in India was still Sunil Mittal-led firm, which was later overthrown by Reliance Jio by the numbers of customers. In the first quarter, Airtel’s revenue in India is Rs 15,345 crore, which is equal to a year-on-year 5.5-percent increase on an underlying basis.

In the same quarter mentioned above, there was a year-on-year 3.7-percent increase in the telecom revenue. Mobile ARPU (average revenue per user) went up to Rs 129. In the meantime, in comparison to the 2,003-PBs (petabytes) traffic data from mobile users in the same quarter in 2018, that figure has doubled to 3,904 PBs.

Last year, for the June quarter, the number of customers using 4G was only 58.3 million. This year, there has been a 63.3-percent growth, which equals to 95.2 million users.

Businesses that aren't related to mobile phones keep showing good performances. Revenue from digital TV witnessed a year-on-year 15.7-percent growth on an underlying basis. According to the firm's representative, there has been a 25.5-percent decline on a reported basis because of the changes in DTH related to the new tariff order, turning content cost into a pass-through expense.

The company’ business has undergone a year-on-year 7.2-percent growth; however, this growth isn't enough to compensate for the total loss, the firm claimed.

Consolidated EBITDA witnessed a year-on-year 24.2-percent increase, which is now Rs 8,493 crore. In the same quarter, while last year's margin of consolidated EBITDA was only 34.5 percent, this year's has been 41 percent, which is equivalent to a 6.4-percent increase. At the same time, there has been a year-on-year 4.5-percent decrease in consolidated EBIT, which is now Rs 1,605 crore.

In the quarter mentioned above, Airtel only gained Rs 5,047 crore; meanwhile, in the previous quarter, the company gained Rs 6,273 crore. At the end of the first half of 2019, the net debt this mobile operator has to suffer from is Rs 1.16 lakh crore.

Airtel reported that:

The firm also claimed that:

Reliance Jio is the only telecom firm that gains financial profit. In the quarter that ends in June, Reliance Jio’s profit was Rs 891 crore; on the contrary, Vodafone Idea suffered from an Rs-4,873.9-crore net loss.

There has been an improvement in Bharti Airtel’s ARPU, which is the result of its decision to issue recharge plans with the cheapest price of Rs 35.

It came as a surprise that in the first three months of 2019, Airtel had gained Rs-107.2-crore profit, which is brought about by its strict control over marketing expenses and sales and its Rs-2,022.1-crore gain in one time. There was also information posted by the firm about its small financial gain in the same period last year.

In the quarter mentioned above, Airtel also made a major announcement, which includes its decision to re-farm spectrum to 4G networks from 3G across the 2,100 and 900 bands and its process of eliminating 3G networks across India.

According to Gopal Vittal, CEO and tel MD of Airtel in South Asia and India:

In addition, he mentioned that in the first quarter, the company’s financial situation has started with an equitable and healthy growth in every line of businesses. Although headline pricing is not high, it hasn’t undergone any fluctuation.

He continued:

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