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Bharti Airtel Results :Bloodbath On The Streets; Net Profit Down By 75%

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The industry continues to see a gory picture and telecom companies in India continue to bleed quarter over quarter, the only difference is, they are bleeding more with the time. This became evident once again today as country’s largest telecom operator, Bharti Airtel, announced its first quarter results. The company’s net profit, on a consolidated basis, plunged 75% in Q1 of 2017 compared to the same period a year ago.

Bharti Airtel posted a net profit of Rs 367 crore for the quarter ended 30 June, 2017 compared to Rs 1462 crore for the same period in the previous fiscal year – a dip of 75%.

In terms of of consolidated revenue, the company clocked Rs 21,958 crore in Q1, 2017 versus Rs 25,547 crore in the same quarter of the previous financial year, showing a decrease of 14%.

“The pricing disruption in the Indian telecom market caused by the entry of a new operator continued with industry revenues declining over 15% Y-o-Y, creating further stress on sector profitability, cash flows and leverage,” said Gopal Vittal, MD and CEO of the company.

If we see country specific earnings, India is its biggest market, and this is where the company is bleeding the maximum – obviously for a ‘new operator’.

Bharti Airtel, for its India market, registered revenues of Rs 17,244 crore for the first quarter in 2017 compared to Rs 19,155 crore for the corresponding period a year ago, showing a dip of 10%.

“Consequently, our revenues declined 10% and EBITDA margin eroded by 5.3% Y-o-Y. We remain committed to providing the best value & experience to our customers and continue to invest towards it. As a result, our network witnessed data and voice traffic growth of 200% & 34% Y-o-Y respectively. We also added 5.2 Mn data customers in the last quarter – our highest ever,” added Vittal who on a day back got reappointed as the company’s CEO and MD for another 5 years.

The company’s consolidated net debt has decreased to Rs 87,840 crore from Rs 91,400 crore in the previous quarter. Net debt excluding the deferred payment liabilities to the DOT and finance lease obligations has decreased by Rs 4,633 crore sequentially in the quarter. Net debt to EBITDA ratio (LTM) for the quarter has remained flat at 2.67 times (vs 2.63 times in the previous quarter). Lower EBITDA along with rising spectrum interest and amortization costs has resulted in deterioration of Return on Capital Employed (ROCE) to 5.6% from 7.6% in the corresponding quarter last year.

While Bharti Airtel or its CEO has not named the new operator, its a child’s guess to know that the operator is Reliance Jio. Since Jio’s launch of 4G services, all the telcos in India are struggling to match with the Mukesh Ambani led firm’s pricing strategy and continue to lose money.

If the Q1 earnings appear disturbing, then the future quarters would be horrific as Jio, so far has targeted the 4G customers of Airtel or similar telcos, but in coming times, and with the launch of Jio Phone, the new operator is going to tap the 2G customers as well.

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CorporateResults

Bharti Infratel Revenue Up By 10%, Profit Down By 12%

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Bharti Infratel, the tower infrastructure arm of Bharti airtel, has posted a 10% growth in reveue in its second quarter ended 30 June, 2017. For the June quarter the company posted revenues of Rs 3524 crore compraed to Rs 3211 crore for the corresponding period a year ago.

The company also showed 12% growth in its EBITDA, from Rs 1408 crore in Q2, 2016 to Rs 1575 crore in Q2, 2017, representing an operating margin of 44.7%.

However, the company’s net profit saw a slump in the reported quarter. Bharti Infratel posted a net profit or profit after tax of Rs 664 crore for the quarter ended 30 June, 2017 as compared to Rs 756 crore in the same period a year ago, showing a dip of 12%.

In terms of total tower assets, at the end of June this year, Bharti Infratel had a total of 90,837 towers, an addition of 1485 towers over the year from the same period. However, this number includes its 42% share of towers from Indus Towers – the tri-party JV between Vodafone India, Idea Cellular and Airtel.

The company had a tenancy ratio of 2.36 at the end of June quarter. In 2016, the same was at 2.20 tenants per tower.

“Indian telecom is moving towards a data centric business model as the demand for data is growing exponentially with the nation decisively embracing the digital world. We continue to observe significant network rollouts for data coverage and we believe all operators will further accelerate their data network rollout plans to grab a share in the growing data market. The Government of India’s Digital India program and Smart City project pose additional opportunity to create infrastructure for sharing on a non-discriminatory basis. As Bharti Infratel and Indus Towers, we are well positioned to grab our fair share of the emerging data led growth market and build vital infrastructure for Smart Cities for sharing on non-discriminatory basis,” said Akhil Gupta, Chairman, Bharti Infratel Limited.

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CorporateNewsResults

Telenor India Revenue Dips 18% In Second Quarter

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Norwegian telecom operator Telenor India that has discontinued its operations under its own name and announced a merger with Bharti Airtel, has shown a 18% dip in its revenue for the second quarter ended June 30.

Telenor’s financial year is same as its calendar year and its books are audited from January.

As per the Q2 results of the company, Telenor India posted a revenue of 1267 million Norwegian Krone (NOK) in Q2 ended 30 June 2017 compared to 1551 million NOK for the same period a year ago.

On a half yearly basis too, the company showed decreased revenue. For half year 2017, Telenor posted revenues of 2575 million NOK for its Indian operations compared to 3070 million NOK the previous half year.

The operating profit is recorded at 12 million NOK for the second quarter of 2017 compared to a loss of 109 million NOK for the same period a year ago. However, if compared to its Q1 of 2017, the operating profit has decreased from 68 million NOK.

Telenor India had announced to get merged with Bharti Airtel in February this year. The closure, as per both the companies, will be done in a period of 12 months.

On a global term, the company has posted revenues of 31.5 billion NOK in the second quarter ended 30 June, 2017 compared to 31 billion NOK for the same period a year ago, showing a growth of 2%.

Telenor’s CEO Sigve Brekke attributed this performance to the increased revenues in Bangladesh and decreasing losses in Thailand and Sweden.

Seeing this performance during the half year, the company has also modified its guidance for the whole year.

“Based on the performance in the first half of 2017 and our current expectations for the remainder of the year, we revise the financial guidance for 2017. We lift the EBITDA margin guidance to 38–39%, from previously around 37%. We still expect an organic revenue growth in the range of 1% to 2% and capex to sales ratio excluding spectrum licences of 15% to 16%,” Telenor said.

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CorporateResults

Cisco Announces 1100 More Job Cuts, Total 6600 In 9 Months

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World’s largest networking gear firm Cisco on Wednesday said it would cut 1100 more jobs across geographies to reduce cost and transform itself more in to a software company.

The company said this while announcing its Q3 results for fiscal 2017.

Earlier, in the beginining of the fiscal year, in August the company had announced to cut 5,500 jobs across geographies. So, in total the company is slashing a total of 6,600 jobs and this will take effect by end of Q1 of 2018 fiscal year.

While slashing the jobs, Cisco said it believes the company will realize a total of $800 to $900 million in pretax charges.

“During the first nine months of fiscal 2017, we have recognized pretax charges of $614 million to our GAAP financial results in relation to this restructuring plan. We expect to recognize approximately $150 million to $200 million of pretax charges under this plan in the fourth quarter of fiscal 2017,” Cisco said.

In terms of the company’s earnings for the third quarter, Cisco posted a total revenue of $11.9 billion with revenues from its product unit remaining flat and that of services going down by 2%.

Geography wise, revenue from APJC that includes India, has dipped by 2% whereas Revenues from americas and EMEA remained flat, the company added.

Segment wise, except security and wireless, all other business units have shown a negative growth and Switching revenue increased marginally by 2%. Revenues from security and wireless, however, grew by 13% and 9% respectively.

Company’s revenues from NGN Routing, Collaboration, Data Center, and Service Provider Video revenue decreased by 2%, 4%, 5%, and 30%, respectively.

The net income of the company grew to $2.5 billion at the end of Q3 ended 29 April from $2.35 billion for the same period a year ago.

However, the company said its happy with its performance.

“I am pleased with the progress we are making on the multi-year transformation of our business,” said Chuck Robbins, CEO, Cisco. “The Network is becoming even more critical to business success as our customers add billions of new connections to their enterprises. We are laser focused on delivering unparalleled value through highly secure, software-defined, automated and intelligent infrastructure.”

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CorporateResults

Vodafone Posts Flat Revenue In FY17 Despite Tough Competition

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Despite touch competition and lucrative free offers from Reliance Jio Vodafone registered a flat revenue in FY 2017 as compared to its performance in FY2016. In 2017 the British born telecom firm posted revenues of Rs 42,956 crore compared to Rs 43,169 crore in FY 2016, showing a marginal dip of 0.5%.

If put in perspective, considering the humongous growth in data consumption across operators, this marginal dip in revenue appears significant. The operator ideally should have shown a better performance with an increase in revenue growth.

However, the entry of reliance Jio, has curtailed the growth of all the big operators in the country including Bharti Airtel and Idea Cellular.

Last week Idea Cellular posted a loss of Rs 325 crore attributing competition and free offer from the new operator. A week before that Bharti Airtel posted 72% dip in its Q4 profit.

For Vodafone in FY 2017, data consumption grew by almost 30% to record Rs 8467 crore revenue from data business showing a revenue growth of 5%. The company has a total of 66.9 million data users of which 43.5 million use more than 1 MB data per month. The company said its data consumption growth was driven by increase in smartphone penetration in its network. Of all the users, 35.5% use a smartphone, the company said.

Vodafone India’s data ARPU for 2017 was Rs 140 compared to Rs 160 in FY 2016. The company attributed this fall to the free data offer from the new entrant, read Jio.

“Amidst an unprecedented and intensely competitive environment, we delivered a stable while recording a strong gain of 0.7ppt in RMS YTD Dec 16; increasing our customer base past the 200 million subscriber mark; and expanding our Vodafone SuperNet 4G presence to 2,400 towns by utilizing the spectrum bought during the year, We continue to delight and reward customers with innovative and meaningful value propositions including SuperHour, exciting 4G offers, richer content under Vodafone Play and added benefits for Vodafone RED customers. We remain committed to playing our role in enabling Digital India by fulfilling the evolving needs of increasing volumes, speed and innovative solutions for both retail and enterprise customers,” said Sunil Sood, Managing Director and CEO, Vodafone India.

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CorporateNewsResults

Haunted By Jio, Idea Posts Q4 Net Loss Of Rs 325 Crore, Second In A Row

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Idea Cellular posted its net loss for the second quarter in a row. In the Q4, Idea Cellular posted a loss of Rs 325 crore compared to a loss of Rs 386 crore in Q3. The company had posted a profit last in its Q2, a meager Rs 90 crore.

For Idea it was unprecedented as the Aditya Birla group had never seen any losses since its gone public a decade back. The company has been blaming the new operator for the loss.

Revenue wise too, the company posted a consolidated total of Rs 8126 crore in Q4 compared to Rs 8663 crore in Q3, showing a dip of 6.2%. This dip is lower compared to 6.9% decline it had posted in Q3 as compared to Q2 of 2017.

In Q3, 2017, Idea Cellular’s revenue was Rs 9300 crore.

For the full year of FY 2017, the company has posted a revenue of Rs 32,959 crore compared Rs 33,558 crore in FY 2016, showing a dip of 1.8%.

“The Indian wireless industry witnessed an unprecedented disruption in the second half of financial year 2016-17 (FY17) on account of free voice & mobile data promotions by the new entrant in the sector. The October to April 2017 interval can be best described as ‘Period of Telecom Discontinuity’, permanently changing mobility business parameters. Consequently, the revenue KPIs & financial parameters for all mobile operators have sharply declined in H2FY17,” the company said while announcing its Q4 and full year financial results.

“For the first time in its history, the flourishing Indian Mobility industry, is trending towards an annual revenue decline of ~2% in FY17 (vs FY16). With the new entrant starting to charge for its services, albeit very slowly, the sector is expected to return to growth in the next financial year,” it further added.

The company said it had to many drastic steps during the period to retain its existing subscribers who, could have been tempted to move to other operators.

In an effort to retain its existing mobile subscribers, Idea was forced to reduce its voice tariff by by 12.5% to 25.9 paisa/min (vs. 29.6 paisa in Q3FY17) as also steeply drop its mobile data rate by 27.6% to 11.5 paisa/MB (vs. 15.9 paisa in Q3FY17).

“However, the lure of free offerings by the new mobile operator resulted in lower than normal volume elasticity with sequential quarterly voice minutes growing by 10.3% to 231.4 billion minutes (vs. 209.8 billion minutes in Q3FY17),” said the operator.

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CorporateResults

Jio Effect : Idea Cellular Revenue Drops To Unforeseen Level

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Idea Cellular today announced its financial results for Q3 and what we witnessed today has not happened in the last 10 years for the Aditya Birla Group run operator. Even in its own terms, Idea Cellular admits the company’s revenue has dropped to an unforeseen level.

The company posted revenues of Rs 8663 crore in Q3 2017 compared to Rs 9300 crore in the previous quarter showing a dip of 6.9% sequentially. This dip was seen across it operating circles.

More shocking is, Idea posted a loss of Rs 386 crore in this quarter compared to a profit of Rs 90 crore in Q2. On a standalone basis too, the firm posted loss of Rs 479 crore compared to a profit of Rs 4 crore. This had never happened since 2007 when the company went public.

The company attributed this negative development to Reliance Jio, of course without exclusively naming it but referring it to as a new operator.

“The Indian mobile industry witnessed an unprecedented disruption in the quarter of October to December 2016, primarily due to free voice & mobile data promotions by the new entrant in the sector,” Idea said in a statement.

“Consequently, revenue KPIs and financial parameters for all mobile operators have sharply declined, and for the first time in its history the flourishing Indian wireless sector is trending towards an annual revenue decline of 3 to 5% in FY2017 (vs FY16). The sector can expect to recover revenues only once the new operator starts charging for its pan India mobile services.”

Idea Cellular said because of this new operator and the difficult trends in the industry it was forced to reduce voice rates by 10.6% per minute and mobile data rates by 15.2% per megabyte. The company also said that because of the free offering, both on voice and data, Idea lost 5.5 million mobile data users during this period.

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CorporateResults

Airtel Q3 Results: Net Profit Tanks To 54%, Revenue Flat

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The Airtel Q3 2017 results is a clear sign how predatory pricing can bleed the industry. The company’s net income plunged to a new low – 54.5%. The company posted a net profit of Rs 503 crore in Q3, 2017 compared to Rs 1108 crore for the same period a year ago.

If we make a quarter on quarter comparison, the Airtel Q3 shows even more troubled picture – a drop of 65.5% compared to the previous quarter. In Q2 2017, company’s net profit was Rs 1460 crore.

“The quarter has seen turbulence due to the continued predatory pricing by a new operator,” said Airtel India & South Asia CEO Gopal Vittal. “This has led to an unprecedented year on year revenue decline for the industry, pressure on margins and a serious impact on the financial health of the sector.”

Revenues for Airtel India in the Q3 2017 rose marginally to post Rs 18013 crore, an increment of 1.8% over Rs 17694 crore posted in the same period previous year. The company said the slowdown in mobile revenue growth
primarily due to free voice and data offering by a new operator.

Airtel was obviously referring at Reliance Jio without directly naming the new operator.

The consolidated revenue of Bharti Airtel, that includes businesses in India, South Asia and Africa has also dropped 3% to post Rs 23336 crore in Q3 2017 compared to Rs 24,066 in Q3 2016.

Airtel Q3 results also shows data consumption has gone up for the operator however, the mobile data ARPU has decreased during the quarter from Rs 200 in Q3 2016 to Rs 175 in this quarter. Data revenue, during this quarter, represented 22.8% of its total revenue showing a dip from the same period a year ago. In Q3, 2016 it contributed 23.1% to the total revenue.

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CorporateResults

Qualcomm Q4 Net Income Up By 51%

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San Diego based Chip maker Qualcomm’s Q4 net income rose by 51% which the company termed as ‘above the high end of its expectations’. The company posted Q4 net income of $1.6 billion for fiscal 2016 compared to $1.1 billion for the same period in fiscal 2015. Sequentially, the net income rose by 11%

The company said the growth was primarily driven by strong demand from China.

“Our fiscal fourth quarter EPS was above the high end of our expectations, reflecting new license agreements in China and strong chipset shipments,” said Steve Mollenkopf, CEO of Qualcomm.

Qualcomm’s Q4 revenue also saw a surge during this period. It reported a growth of 13% to post revenues of $6.2 billion compared to $5.5 billion in Q4 of fiscal 2015.

Sequentially the company’s revenue grew by 2%, from $6 billion in Q3.

The company believes this upward trend to continue in the next fiscal as well.

“We are forecasting continued growth of global 3G/4G device shipments in calendar year 2017, led by growing demand in emerging regions. We are well positioned to extend our mobile technology leadership and footprint into attractive growth opportunities, accelerated by our recently announced agreement to acquire NXP,” Mollenkopf added.

The company last week had announced to acquire NXP Semiconductors for $38 billion.

Qualcomm also reported that in Q4 it shipped 211 million smartphone chips as against its own estimate of 1950215 million. The company supplies smartphone chips to Android devices as well as to Apple.

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CorporateResults

Airtel Q1 Revenue Up 8%, Net Dips 31%

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Bharti-Airtel-And-Bharti-Infratel-To-Improve-Sanitation-For-50,000-Individuals-Across-405-VillagesBharti Airtel, country’s top operator, registered a revenue growth of close to 8% in its first quarter ended June 31 compared to the same period a year ago. In FY 2016 Q1 Airtel posted revenue of Rs 25,546 crore as against Rs 23,671 crore in for the same period of last fiscal registering a growth of 7.9%.

However, in terms of net profit the company saw a major dip. Airtel’s net profit for the reported period jumped 31% to touch Rs 1462 crore where as against the profit of Rs 2113 crore in Q1 of FY2015-16.

On standalone basis, revenues from India business for Q1’17 were registered at Rs 19,155 crore growing by 10.3% Y-o-Y (net revenues up 11.9% Y-o-Y). This was led by healthy growth of 9.1% in Mobile, 11.0% in Homes, 22.2% in Digital TV and 10.4% in Airtel Business on Y-o-Y basis. The Company has realigned its India segment reporting in line with management reorganisation. Consequently, Airtel Business also now includes the erstwhile Corporate fixed line voice and fixed line data business which was hitherto reported with Telemedia segment.

“The year has begun well with revenue growth of 10.3% Y-o-Y and continued revenue market share gains. In continuation of our Project Leap announcement, we have now transparently opened up our entire mobile network to our customers so as to partner them in striving to deliver a world class experience,” said Gopal Vittal, MD&CEO, Airtel India and South Asia.

Mobile Data revenues cross Rs 3,500 crore and at Rs 3,525 crore grew by 35.1% Y-o-Y, led by increase in the Data customer base by 19.1% and traffic by 54.9%. Mobile Broadband customers increased by 68.3% to 36.6 Mn from 21.7 Mn in the corresponding quarter last year. Data ARPU has moved up by Rs 21 Y-o-Y to Rs 202 in Q1’17, led by 28.1% increase in usage per customer. Mobile Data revenues now contribute to 23.7% of Mobile India revenues visà-vis 19.2% in the corresponding quarter last year.

Revenues from Africa business grew by 3.8% Y-o-Y. Data revenues at $ 154 million grew by 31.2% Y-oY, led by increase in Data customer base by 26.0% and traffic by 106.2%. Data ARPU increased to $ 3.2 from $ 3.1 in the corresponding quarter last year. Data revenues now contribute to 16.5% of overall Africa revenues vis-à-vis 12.9% in the corresponding quarter last year. Africa underlying EBITDA margin is up Y-o-Y by 3.6% to 22.5%. Active Airtel Money customer base at 8.6 million, boosting the total transaction value on Airtel Money platform by 62.0% to $ 5.1 billion.

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