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Airtel Q2 net profit jumps 89% on year; Digital TV revenue remained stable

Bharti Airtel Limited announced its audited consolidated results for the second quarter ended September 30, 2022.

Q2’23 Performance:
The consolidated revenues for Q2’23 at Rs 34,527 crore grew 21.9% YoY. Consolidated mobile data traffic at 13,232 PBs in the quarter with a healthy YoY growth of 20.9%.

India revenues for Q2’23 at Rs 24,333 crore, increased by 22.3% YoY. Mobile revenues grew by 24.8% YoY on account of improved realisation as well as strong 4G customer additions during the year. ARPU for the quarter stood at Rs 190 as compared to Rs 153 in Q2’22 on the back of our continued focus on quality customers, feature phone to smartphone upgradation and data monetization.

We strengthened our leadership position in Postpaid segment with a customer base of 31.6 Mn (including IoT). We continue to gain strong share of the 4G customers in the market and added 17.8 Mn 4G data customers to our network over last year, an increase of 9.2% YoY. ARPU continues to be the best in industry, average data usage per data customer at 20.3 GBs/month and voice usage per customer at 1,082 mins /month.

We rolled out additional ~8k towers in the quarter to further strengthen our network coverage and provide ubiquitous connectivity. Several initiatives have also been undertaken to improve Network quality – leveraging digital tools/probes to monitor and improve customer experience and scaling up Vo-Wi-Fi adoption to improve indoor experience. We now have over 47 Mn customers using our Vo-Wi-Fi services.

Post a successful spectrum auction and a quick and seamless allocation by DoT, the country witnessed the launch of 5G services by Honourable Prime Minister Shri Narendra Modi at the IMC 2022. Airtel became the first telecom operator in India to roll out 5G services with a launch in 8 cities. Eventually we plan to cover all of urban and key rural areas of India by March 2024. Airtel 5G Plus promises to offer massive speeds, best voice experience, will work on all 5G smart phones and be kinder to the environment.

Homes business segment continues its strong momentum and delivers a revenue growth of 38.9% YoY, an outcome of continued acceleration on the back of growing need for reliable and consistent broadband in India. We added 417 K customers during the quarter to reach to a total base of 5.2 Mn. We continue to accelerate our rollouts on the back of innovative asset light local cable operator partnership model, we are now live in 1060 cities through this model.

Airtel Business continues its numero uno position with 16.8% YoY revenue growth and widening the gap with its nearest competitor by leveraging the converged portfolio of Airtel and harvesting the rapidly increasing demand for data and connectivity related solutions. Our strategy of going both wide to penetrate more accounts as well as deep has led to continuous outperformance and market share expansion.

Revenue of Digital TV remained stable with customer base1 of 15.8 Mn at the end of the quarter. DTH business is showing early green shoots of recovery as an outcome of our strategy of simplifying pricing and offering converged propositions to win high value customers. We have been scaling our digital capabilities to deliver best-in-class experience and offering differentiated digital services to our customers. We have robust customer base of over 190 Mn MAUs across our key digital assets – Thanks, Xstream and Wynk. In our continuous endeavour to deliver additional value proposition to our customers through innovation, we launched Airtel Xsafe – an advanced home surveillance solution which allows customer to keep an eye on loved ones.

There are over 1.2 million retailers transacting and making payments every day on Mitra App. During the quarter, Airtel Payments Bank continued to expand rapidly with a strong total customer base of 151 Mn and highly engaged Monthly Transacting Users (MTU) base of over 50 Mn.

Consolidated EBITDA witnessed an increase of 26.4% YoY to Rs 17,721 crore in Q2’23. This led to an improvement in EBITDA margin from 49.5% in Q2’22 to 51.3% in Q2’23 as we continue to focus on our War on Waste program to help fuel margin improvements. EBITDA margins across businesses remained healthy, with India mobile services EBITDA improving from 49.2% in Q2’22 to 52.4% in Q2’23.

Consolidated EBIT increased by 52.2% YoY to Rs 8,762 crore. The Consolidated Net Income before exceptional items for the quarter stands at Rs 2,052 crore. The Consolidated Net income after exceptional items grew by 89.1% YoY to Rs 2,145 crore.

Airtel has paid 4 years of 2022 spectrum dues worth Rs 8312 crores. This upfront payment coupled with ongoing moratorium on spectrum dues and AGR will free up future cash flows and allow us to dedicate resources to drive 5G roll out.

The Net Debt-EBITDA ratio (annualized) and including the impact of leases as on September 30, 2022 is at 2.96 times, same as corresponding quarter last year in spite of acquiring the 5G spectrum.

Our focus to drive the ESG agenda was recognized as we won the Golden Peacock Global Award for Excellence in Corporate Governance, 2022.

In a statement, Gopal Vittal, MD and CEO, India & South Asia, said:

“We have delivered yet another quarter with competitive revenue growth and improved margins. Our consolidated revenue grew sequentially by 5.3% and EBITDA margin expanded to 51.3%. The consistency of our execution is driven by the strength and resilience of our portfolio. Our B2B and Homes business continued their strong growth momentum while Mobile ARPU expanded to 190 on the back of premiumization and deep customer understanding.

We are now rolling out 5G and are confident that Airtel 5G Plus will deliver the best experience in India while being kinder to the environment. I do believe that 5G technology has the potential of bringing tremendous innovation into India. At the same time we remain concerned about the low ROCE that our business delivers due to pricing that is the lowest in the world. Given the large investments required to drive digital adoption in India we believe there is a need for tariff correction.” BCS Bureau

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