Bharti Airtel posts lowest profit for four years
Launch of rival Reliance Jio has seen Bharti's net profits more than halve year-on-year
Bharti Airtel has reported its lowest profit for four years as the plummeting Indian mobile market continued to impact revenues.
Prices for mobile services in India have been slashed as operators look to compete with Reliance Jio, launched in September, which is owned by the country’s richest man Mukesh Ambani.
Jio launched offering huge discounts, managing to attract more than 50 million customers in just 83 days, forcing its rivals to respond by cutting their own prices.
Airtel saw its consolidated net profit fall to 5.04 billion rupees ($73.99 million) in the three months ending 31 December, less than half of the 11.08 billion rupees ($162 million) posted in Q3 2015, and the lowest profit since 2012.
Revenues fell 3% to 233.64 billion rupees ($3.4 billion), the company’s first ever year-on-year fall in revenue. On a quarterly basis, these were down 5.3% from Q2, while operating profit was down 9.5%.
"The quarter has seen turbulence due to the continued predatory pricing by a new operator," Gopal Vittal, Bharti's managing director and chief executive for India and South Asia, said in a statement on Tuesday.
"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."
It wasn’t just the Indian market where Bharti Airtel faced problems, however, as it also posted increased losses at its African operations. Losses grew from 4.87 billion to 6.2 billion rupees, driven in part by the devaluation of the Nigerian currency.