Jio nightmare becomes very real for Bharti as profit plunges 75%

What could have been described as a headache for the last couple of months has progressed into full blown migraine, as the Jio challenge hits Bharti Airtel hard in the wallet.

Jamie Davies

July 25, 2017

2 Min Read
Jio nightmare becomes very real for Bharti as profit plunges 75%

What could have been described as a headache for the last couple of months has progressed into full blown migraine, as the Jio challenge hits Bharti Airtel hard in the wallet.

The company has just reported its results for the quarter ending June 30 and it isn’t pretty at all. Total revenues dropped to 219.58 billion rupees, a year-on-year decline of 14%, whereas profits were slashed by 75% to 3.67 billion rupees. It is the lowest profit at Bharti Airtel since December 2012, though the only saving grace is that this number is higher than what analysts were expecting.

Many of the problems can be led back to the emergence of Jio, which has been stealing customers at almost unprecedented levels, many of which would have bolstered the Bharti bank accounts in recent quarters. The last two quarters have seen slight declines due to the Jio effect, but this is a gargantuan drop.

In terms of the specifics:

Business Unit

2017

2016

% change

Mobile Services (India)

129.146

150.42

-14.1

Mobile Services (Africa)

48.528

62.493

-22.3

Mobile Services (South Asia)

0.972

4.143

-76.5

Airtel Business

27.787

26.793

3.7

Tower Infrastructure Services

15.982

14.557

9.8

Home Services

6.703

6.644

0.9

Digital TV Services

8.974

8.367

7.3

Other

1.02

0.93

9.7

Eliminations

-19.531

-18.884

3.4

Total Revenues

219.581

255.465

-14.0

As you can see from the table above, figures are in billions of rupees, there are a few bright spots for the team, especially when you look at diversification in the Digital TV space, but the core business has taken quite a hit.

The latest Jio offer has the potential to cause further disruption, however it does appear Bharti is starting to fight back. The last six months has seen the telco provide numerous offers to lure back customers who have found the 2 GB daily allowance on Jio too low. The latest results suggest these offers have not been enough to counter the Jio threat, but we’re hoping some bright ideas come out of the Bharti Airtel think tank before too long. This is a worrying decline.

Get the latest news straight to your inbox.
Register for the Telecoms.com newsletter here.

You May Also Like