Reliance Jio’s impact on Bharti Airtel’s numbers may intensify according to analysts. Bharti Airtel's third quarter net profit slumped 55 per cent while its net profit stood at Rs 504 crore. The number one telco's revenue fell 3 per cent to Rs 23,336 crore from a year earlier.
‘The sector consolidation catalyzed by Reliance Jio’s entry is in its penultimate phase,’ said Deutsche Bank in its report on Tuesday. Analysts added that demonetisation too played a role albeit not as strong as the new entrant in the sector, which with its freebies has led to battle of price wars that may cripple the industry in the short term.
JP Morgan in its report says Bharti Airtel and the India telcom industry will face a number of structural issues such moderating data revenue growth; the continued pressure on voice and data realizations due to high competitive intensity; an increase in capex and network opex due to data growth; the cannibalization of voice services by data in the medium to long term; and (the imminent commercial launch by Reliance Jio. ‘We see these factors impairing Bharti’s eligibility as a structural investment story,’ said the brokerage company.
Reliance Jio is expected to start charging its customers a nominal amount by March end , when its free offer ends. Mobile data revenue for the Sunil Mittal owned firm during the quarter fell 2.1% compared with a growth of 23.6 % in the previous quarter and about 60 %at the same time last year.
Goldman Sachs Equity Research in its report noted that the company lost 7.7 million data customers in the third quarter (12% of its base), despite overall subscriber addition of 6 million in the quarter, indicating some of Bharti’s customers with Jio as a secondary sim did not use any data on Bharti’s network in the month of December.
Airtel's ARPU for voice and data combined plunged 8.4 per cent quarter on quarter (q-o-q), while MoU increased 3.2 per cent sequentially. Voice and data ARPUs fell 6.4 per cent and 13 per cent , respectively, q-o-q, while realised rates for both services dropped 9.3 per cent and 10.5 per cent .
The company's board has approved raising up to Rs 10,000 crore, the maximum permitted under rules, via a private placement of non-convertible debentures.
Its international operations too have been severely hit. A CLSA report stated that Bharti’s international revenue was impacted by the sale of operations and tower assets in Africa, Nigerian currency devaluation and the merger of Bangladesh operations.
The company's net loss in Africa operations widened to $93 million from $74 million, hurt mainly by finance costs. Its international revenue fell 16% YoY although underlying Africa revenue growth was 6% YoY. We factor in divested businesses in our international forecasts.
Analysts in brokerage firm JP Morgan said that what saved the company from a complete washout was its non-mobile India businesses (essentially its homes or broadband, digital TV, towers and Airtel [B2B]), which as a group exhibited good double-digit percentage growth.
‘The sector consolidation catalyzed by Reliance Jio’s entry is in its penultimate phase,’ said Deutsche Bank in its report on Tuesday. Analysts added that demonetisation too played a role albeit not as strong as the new entrant in the sector, which with its freebies has led to battle of price wars that may cripple the industry in the short term.
JP Morgan in its report says Bharti Airtel and the India telcom industry will face a number of structural issues such moderating data revenue growth; the continued pressure on voice and data realizations due to high competitive intensity; an increase in capex and network opex due to data growth; the cannibalization of voice services by data in the medium to long term; and (the imminent commercial launch by Reliance Jio. ‘We see these factors impairing Bharti’s eligibility as a structural investment story,’ said the brokerage company.
Reliance Jio is expected to start charging its customers a nominal amount by March end , when its free offer ends. Mobile data revenue for the Sunil Mittal owned firm during the quarter fell 2.1% compared with a growth of 23.6 % in the previous quarter and about 60 %at the same time last year.
Goldman Sachs Equity Research in its report noted that the company lost 7.7 million data customers in the third quarter (12% of its base), despite overall subscriber addition of 6 million in the quarter, indicating some of Bharti’s customers with Jio as a secondary sim did not use any data on Bharti’s network in the month of December.
Airtel's ARPU for voice and data combined plunged 8.4 per cent quarter on quarter (q-o-q), while MoU increased 3.2 per cent sequentially. Voice and data ARPUs fell 6.4 per cent and 13 per cent , respectively, q-o-q, while realised rates for both services dropped 9.3 per cent and 10.5 per cent .
The company's board has approved raising up to Rs 10,000 crore, the maximum permitted under rules, via a private placement of non-convertible debentures.
Its international operations too have been severely hit. A CLSA report stated that Bharti’s international revenue was impacted by the sale of operations and tower assets in Africa, Nigerian currency devaluation and the merger of Bangladesh operations.
The company's net loss in Africa operations widened to $93 million from $74 million, hurt mainly by finance costs. Its international revenue fell 16% YoY although underlying Africa revenue growth was 6% YoY. We factor in divested businesses in our international forecasts.
Analysts in brokerage firm JP Morgan said that what saved the company from a complete washout was its non-mobile India businesses (essentially its homes or broadband, digital TV, towers and Airtel [B2B]), which as a group exhibited good double-digit percentage growth.
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