Bharti Airtel: Ringing True
Bharti airtel had over 403 million customers across operations at the end of march 2019
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Bharti Airtel believes that the role of telecom companies is no longer restricted to just providing the “pipe” and the right price plan. It is now about creating an ecosystem of digital services (music, content, payments and much more) and leveraging data, network, and distribution assets to deliver these services. It is a well-known fact now that the Indian telecom space has been under duress for some years. There are losses, high-taxes, low revenue numbers and historical debts and outgoings to be paid in the coming years.
Despite the rough weather, Bharti Airtel has been growing its business and competing with new challenges. It is therefore a part of the prestigious list of Most Respected Companies by BW Businessworld, having made it to the 10th spot in the BW 500 special issue last month.
How was the last year? For the full year 2018-19, Bharti Airtel posted revenues of Rs 80,780.2 crore that was 2.2 per cent lower than Rs 82,638.8 crore in the previous fiscal. The company’s net profit more than halved to Rs 409.5 crore due to intense competition with Jio. And that is perhaps the reason why Airtel neither issued the customary press statement detailing earning statements and management commentary nor provided average revenue per user - a key metrics tracked by analysts. The Delhi-headquartered telecom giant had over 403 million customers across its operations at the end of March 2019. While subscribers may be growing, the annual consolidated revenues for Bharti Airtel grew meagrly to Rs 83,921 crore.
Anyhow, there are a number of positives that indicate both hope and promise for future profitability for the telecom operators in India. For starters, with 604.2 million internet subscribers, as of December 2018, India ranks as the world’s second-largest market in terms of total internet users. Further, India is also the world’s second-largest telecommunications market, with total subscriber base of 1,183.5 million at the end of March 2019. Moreover, in 2017, India surpassed the US to become the second-largest market in terms of number of app downloads. The country remained as the world’s fastest growing market for Google Play downloads in the second and third quarter of 2018.
Over the next five years, rise in mobile-phone penetration and decline in data costs is expected to add at least 500 million new Internet users in India, creating opportunities for new businesses.
Undoubtedly, FY’19 turned out to be yet another decisive year for the industry on multiple counts. A Supreme Court order puts a financial burden in excess of Rs 1.3 lakh crore on the incumbent telecom operators on an old case regarding the definition of adjusted gross revenue (AGR). These fines have certainly stretched the balance sheets of the operators and they are finding it difficult to survive. Despite the trying environment Bharti Airtel continues to shine as a leading telecom service provider in 2020.
“On the AGR verdict of the Supreme Court, we continue to engage with the government and are evaluating various options available to us. We are hopeful that the government will take a considerate view in this matter given the fragile state of the industry,” says Gopal Vittal, MD & CEO, India & South Asia.
Bharti Airtel continues to be a leading global telecommunications company with operations in 18 countries across Asia and Africa. Airtel Africa had a robust year on all parameters. With the addition of 10 million new customers, the count reached 99 million. Total revenues witnessed strong growth aided by significant expansion in data revenue (31per cent) and Airtel Money (60per cent). EBITDA margin expanded by 4 per cent underlining the efficacy of the Telecom operator’s efforts in operational efficiency.