CHENNAI: Bharti Airtel on Tuesday reported a 77.79 per cent fall in consolidated net profit at Rs 82.90 crore for the March quarter, as fierce tariff war and fall in international termination charges dented the bottom line of the company.
The Sunil Bharti Mittal-led telecom firm had registered a net profit of Rs 373 crore in the same period a year ago. Total revenue also slipped by 10.50 per cent to Rs 19,634 crore during the quarter under review.
“The telecom industry continues to witness below cost, artificially suppressed pricing,” Gopal Vittal, Bharti Airtel’s managing director and chief executive for India and South Asia, said in a statement on Tuesday. Industry revenues were further adversely impacted this quarter due to the reduction in international termination rates, he said.
The entry of Reliance Jio has set off a brutal price war among operators and also seen the profitability of these telcos decline sharply as Vodafone India and Idea Cellular slipped into losses and Anil Ambani’s Reliance Communications shut business.
It must be noted that Airtel is perhaps the only large company that has still managed to remain profitable.
Compounding to the industry’s woes, telecom regulator TRAI had also cut international termination charges paid by global long-distance operators to local carriers to 30 paise from 53 paise, effective from February.“TRAI has prescribed changes in inter-connect usage charges for international incoming traffic effective February 1, 2018, which has led to a drop in gross revenue by Rs 123.5 crore and EBITDA by Rs 86.10 crore in the current quarter with negligible impact on EBITDA margins,” the company said.