Bharti Airtel loss narrows, revenue beats analyst estimates – ARPU rises to ₹162

• Airtel beat analyst expectations, reporting a revenue growth of 7% in the September quarter when compared to June.
  
• Airtel’s revenue stood at ₹25,785 crore, while its losses came down to ₹763 crore from ₹15,933 crore in the previous quarter.
  
• It also expanded its EBITDA margins to 46%, up by 366 basis points year-on-year.
  
• Airtel also posted a major increase in its average revenue per user (ARPU), which now stands at ₹162.
  
• Check out the latest news and updates on Business Insider.
  

Telecom major Airtel announced a revenue growth of 7% in the quarter ended September 2020, beating analyst expectations. The growth in revenue was led by an increase in the revenue generated from Airtel’s mobile services in both the Indian as well as African markets.

According to analysts, Airtel was expected to report a growth of up to 4.6% in revenue. However, the telco reported revenue of ₹25,785 crore in the September quarter, as opposed to ₹23,939 crore in the June quarter. In the same period last year, Airtel reported ₹21,131 crore revenue, recording a healthy growth of 18% this year.

Airtel’s ARPU gets a major boost

Airtel’s average revenue per user (ARPU) increased to ₹162, which is an increase of 21% over ARPU of ₹128 in the same period last year.

The telco also posted a healthy data usage per subscriber of 16GB per month. Its 4G data customers stood at 152.7 million, up by 14.4 million in this quarter.

Ballooning losses now under control

In addition to improving its revenue and operating profit growth, Airtel also brought its ballooning losses under control. For the September quarter, Airtel posted a net loss of ₹763 crore, which is a significant reduction from the ₹15,933 crore it posted in the previous quarter.

In the same period last year, Airtel reported a net loss of ₹23,045 crore.

Airtel’s operating margins soar

Airtel’s EBITDA performance was also markedly better than analyst expectations. While analysts estimated a jump of up to 5.8%, Airtel reported an increase of 8% when compared to the June quarter. On a year-on-year basis, Airtel’s EBITDA jumped by 22%.

EBITDA stands for earnings before interest, tax, depreciation and amortization. It is a measure of a company’s short-term operating profitability.

Airtel’s EBITDA margins stood at 46%, up by 366 basis points (bps) year-on-year. One hundred bps make up 1%.

Mobile services continue to be Airtel’s revenue drivers

Despite its efforts to expand its range of offerings, Airtel remains a mobile service provider at its core. This is reflected in its earnings, driven primarily by mobile services.

Out of the ₹25,785 crore revenue, mobile services contributed ₹21,000 crore, which is over 80% of the total earnings. Of this, the Indian market contributed 66%, with the rest coming from the African market.

Overall, the mobile services business grew by 8% compared to the June quarter, while the tower business grew by 7%. The Digital TV services business recorded a meagre growth of 1%.

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