|India Mobile||India Overall|
HIGHER OPERATING COSTS
More worryingly, losses increased at a pace faster than the revenue decline.
The India mobile business had a loss of Rs 1,592 cr in the September quarter, before interest and tax.
In comparison, the loss was only Rs 878 cr in the preceding three months and Rs 482 cr in the three months before that.
For the India business as a whole (including non-mobile businesses), the company had a loss of Rs 250 cr prior to interest and tax costs, compared to a profit of Rs 529 cr in the preceding three months.
Besides the decline in mobile revenue, a sharp increase in ‘network operating costs’ in India contributed to the jump in losses.
Network operating costs in the India business jumped to Rs 4,369 cr from Rs 3,947 in the preceding quarter.
The declining revenue also impacted the company’s average revenue per user or ARPU.
Mobile ARPU fell to Rs 101 per month from Rs 106 in the preceding quarter and Rs 116 in the three months before that — drawing ever so close to the psychologically important Rs 100 mark.
This was despite a decline in its total mobile subscribers in India to 32.97 cr (330 mln) from 33.63 cr three months earlier.
Part of the reason for the decline could be the pressure exerted by Jiophone, the ultra-cheap featurephone competitor from competitor Reliance Jio.
Speaking at a function today, Jio’s Chairman Mukesh Ambani said his company had sold 50 million (5 cr) such affordable devices in the last eight months.
The increasing popularity of the Jiophone exerts pressure on Airtel’s voice sales, as the Jiophone offers unlimited calls at just Rs 49 per month — less than half of what Airtel charges.
Meanwhile, consumption of data continued to increase on Airtel’s network, putting pressure on operating costs.
Total data carried by the mobile network jumped 24% in three months to about 2.6 million terabytes during the period. Still, it was only about one third of the 7.7 million TB carried by Reliance Jio during the same three months.
Voice consumption, however, seemed to be stabilizing, and rose only 1.3% on quarter to 693 billion minutes, suggesting that soaring Jiophone sales may be having some impact on the company. For comparison, Jio carried 534 bln minutes during the same three months.
Airtel has been trying hard to convert as many of its customers into 4G data customers as possible.
During the quarter, it managed to sign up 7.5 mln new 4G data customers, taking the total to about 65.7 mln. For comparison, Jio is estimated to have around 200 mln 4G data customers.