Record quarter for Bharti Airtel – $2bn Revenue + 80 million customers
India’s largest Telecommunications company Bharti Airtel achieved a new milestone by recording Rs 9,000 crore revenue in Q2FY2009 [@ Rs 45 / $] and also added the highest number of customers in any single quarter since its inception, 8.2 mn taking the total tally to 80 mn [79.89 mn]. Telecom India has neatly stacked up subscriber base of each Telco in India.
Insight into Bharti’s results,
- As an investor one should notice that the Net Profit Margin has probably hit the peak last quarter. In 2005, Bharti had a NP Margin of 18.7% and due to operational efficiencies it was constantly rising until June-08 to hit 23.9% and decline to 22.7% at the end of Sept-2008. This could be due to increased CAPEX in DTH TV, all this means, there is increased competition ahead
- Bulk of Bharti Airtel’s customer come from Mobile services – 77.47 mn. ARPU has slipped to Rs 335 from Rs 350 without any increase in Minutes of Usage. Pre-paid churn declined to 3.2% from 3.8% a quarter ago, this should decrease as we near the era of Mobile number portability. Airtel Mobile has 24.6% market share of Wireless services in India. Airtel has 60,000 towers and is sharing some of them with Indus [Vodafone + Idea cellular]
- Bharti Telemedia [ Wireline + Broadband] saw 5% QoQ increase in customer base to 2.5 mn. ARPU has marginally increased to Rs 1,147 from Rs 1,138. Airtel Broadband subscribers reached 920,000. Unfortuntaely, Bharti is not too aggressive in expanding its broadband network. Going forward, bandwidth prices will decline but most customers will stay in the same pricing plan and will demand more bandwidth. Earlier Rs 999 / 900 would BUY 256 Kbps unlimited data transfer pipe with some free calls and today its is 384 Kbps. Some impatient A$$ like me will opt for the 1 Mbps pipe
- National Long distance usage grew by 10% while International Long distance minutes used saw a growth of 12% compard to previous quarter.
- Has Bharti silently started downsizing ? Employee count down 2% QoQ to 25,616.
Lets wait for the management guidance and its plans for the rough road ahead of us. Going by Bharti’s results, I expect Reliance Communications results to be terrible as they sail into the GSM CAPEX boat now and 3G later.
Update – Highlights of Conference Call:
- To a question on employee downsizing, Manoj Kohli said that consolidation of operations has led to better productivity and utilization – Customers / Employee and Revenues / Employee. Airtel is also moving towards Unified Billing to a customer who subscribes to various services.
- Atul Bindal refused to divulge the details of DTH CAPEX however from the next quarter DTH revenues will be reported separately
- Higher Network Operations Cost as Airtel expands into interiors of India where there is no Power and the company has to run on Generator sets
- Airtel is not worried about excess GSM capcity by new operators as Airtel was not a manufacturing company and belived in providing unmtached quality of service. The company is facing some spectrum shortage in Metro Circles, however, it is continuously striving to deploy new technologies to keep the customer happy. [From personal experience in Karnataka circle, Airtel does provide unmatched customer care and enhancing the same]
- Infratel IPO will not happen until 2010 and Airtel will transfer ~35,000 towers to Indus. It is open for passive infrastructure sharing with Telnor or Datacom.
Reliance Free Notebook with Wireless Internet Subscription
Reliance Communications has unveiled a Free Notebook offer with a 24 month subscription to Reliance Wireless Internet / Netconnect. If you notice, RCom brands this service as Internet / Netconnect and not broadband or broadnet, that means the speed one gets is definitely less than 256 Kbps.
Why is Reliance Communications getting aggressive here ?
RCom is serving its Wireless internet customers on 1xRTT Technology in the CDMA technology. RCom’s strategy here is to have as many customers as possible on this platform [evident from Big TV DTH numbers] as they can later upgrade them once 3G rollout happens, hopefully in the next 18 months. So will RCom’s CDMA network be more for Internet / Data usage ?
GSM Subscribers have all the Fun, so migrate CDMA subscribers to GSM ?
Going by the ARPU differential between RCom and Bharti Airtel, it is evident that high paying consumers are on the GSM network and hence Reliance has no choice but to migtare migrate. Also if you notice, all the popular smart phone handsets are released for GSM network [iPhone, Google Android, Nokia's N Series, etc] They are the potential customers to fill the Telcos coffers with high usage [Voice, Data, Value Added Services etc]
Peer SMS + Blogs – Web 2.0 Media Knocks ICICI Reputation – Drags Stock Down
Indian companies – ISPs, Banks, Consumer Products, etc known for their arrogance towards consumers are finding it increasingly difficult to accept the new age media [Internet and Mobile], mostly because these companies don’t have the courtesy to acknowledge customers problems and willing to learn from them.
Few days ago, one of the victims of this new media campaign was ICICI Bank. I don’t have to tell you how good ICICI’s customer care is and encashing on this poor state of affairs in the company, some broker/s brokers probably made a quick buck by circulating SMS messages which landed on SMS sharing website SMSGupShup for wider circulation. MarketBhavishya a financial blog acted as catalyst according to FIR and the result was ICICI Bank shares tanked more than 25% in intra-day trading.
Not too long ago, I had written about another company Gremach Infrastructure suing Toxic Writer an anonymous blogger who tried to expose something related to Gremach’s activities in Africa, but his blog was shut down by a Court Order.
What has happend in India is most consumers had to adjust to the “Chalta Hey” attitude in the past, because of limited resources to fight against the Monsters. However, with Mobile and Internet in the hands of frustrated consumer, Companies and Big Brands reputation can be wiped out in matter of few hours to days
Personally, I am a strong advocate of Free Speech and would love to see more and more consumers venting their frustration out on the Web against Big Companies / Brands as this is the only way to teach a lesson since we all know how efficient Governments in India are
WiMax for Broadband India Conference
WiMax, the disruptive Wireless Technology, mostly suitable for providing broadband and data services is getting a big boost from the Government of India. The Ministry for Communications is hosting a two day expo cum conference at Hotel Shangri La, New Delhi on the 15th and 16th of this month.
Though WiMax 1.0 in India has a lackluster performance and large number of unsatisfied customers, the Government along with the industry is all set to embrace the technology and likely to address the issues. If you are in Delhi, then you might want to attend the keynote on the 15th by Dr. A Paulraj of Stanford University, one of the key researchers on WiMax and Wireless Broadband.
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