Aided by one-off gains, incumbent telecom major Bharti Airtel posted a consolidated net profit of Rs 1.18 billion for the September 2018 quarter. This was 22 per cent higher than the Rs 0.97 billion it reported in the June quarter though down 65 per cent over the year ago period. There were two one-offs in the quarter which included a deferred tax write back offset by network related charge, resulting in an exceptional gain of Rs 10.13 billion. But for the gain, the company would have been in the red as pre-exceptional loss stood at Rs 9.65 billion.

On the operational front, pricing pressures continue to take a toll on revenues and margins especially for its India business. Consolidated revenues for September quarter was Rs 204 billion dropping 6.2 per cent on a year-on-year basis and growing 1.7 per cent sequentially and at par with street estimates.

India revenues for Q2 FY19 at Rs 149 billion declined 10.9 per cent over Rs 167 billion reported a year ago. Mobile revenues witnessed a y-o-y fall of 7.2 per cent led by continued ARPU down-trading impacted by competitive pricing pressures, said the company in a statement.

The trend of falling average revenue per user or ARPU continued as the metric dropped 4.5 per cent to Rs 101 sequentially and almost 29 per cent from last year’s number of Rs 142. However, the fall has been lower than the 7-8 per cent decline to Rs 97-Rs 98 most analysts had predicted due to the full impact of Telenor customers on the Airtel network as well as the seasonality impact.

“Led by our focus on quality customers through simplified pricing and content partnerships, ARPU decline has moderated in this quarter. We remain focused on driving quality base growth with value adding propositions for our customers, “said Gopal Vittal, MD and CEO, India & South Asia.

Though new entrant Reliance Jio’s (RJio) ARPU also fell 2 per cent in the quarter it still leads the industry on this parameter at Rs 131.7 on strong strong subscriber additions. It is on the subscriber front that Reliance Jio’s gains stand out.

While Airtel’s subscriber base fell 2 per cent over the previous quarter to 329.6 million, Reliance Jio’s base increased 17.2 per cent to 252.3 million. If this pace continues and Airtel is unable to make much headway, RJio would probably overtake Airtel before the end of the fiscal year on the subscriber front.

Consolidated operating profit margin decreased by 570 basis points to 31.1 per cent in the quarter as compared to 36.8 per cent in the corresponding quarter last year. Consolidated EBIT dropped by 67.3 per cent Y-o-Y to Rs 1.07 billion. Net debt increased to Rs 1.13 trillion from Rs 1.03 trillion in the last quarter. Consolidated EBITDA at Rs 63.4 billion declined 20.7 per cent Y-o-Y.

Africa business witnessed stable growth as gross revenue increased by 11 per cent on a y-o-y basis to Rs 56.54 billion. “Data traffic grew by 53 per cent, voice minutes increased by 36 per cent and Airtel Money throughput grew by 31 per cent on a Y-o-Y basis. Consequently, EBITDA margin has expanded by Rs 4 per cent Y-o-Y and stood at 37.1 per cent for the quarter,” said Raghunath Mandava, MD and CEO, Africa.