Bharti Airtel: Profit Upturn

After registering declining profits for 15 straight quarters, Bharti Airtel re-ported an improvement in its bottom line for the three-month period ended December 2013. The company’s net profits in-creased by 115 per cent from Rs 2.84 billion in the quarter ended December 2012 to Rs 6.1 billion for the corresponding quarter in 2013. Profits increased primarily on account of a 13.17 per cent decline in net finance costs from Rs 12.31 billion to Rs 10.68 billion during this period. The operator also reduced its debt from Rs 583.93 billion as of end-December 2012 to Rs 576.43 billion as of end-December 2013.  Meanwhile, the total revenue from operations grew by 13 per cent from Rs 193.62 billion for the quarter ended December 2012 to Rs 219.38 billion for the same quarter in 2013.

Indian operations continue to grow

During October-December 2013, Bharti Airtel’s revenues from its Indian operations stood at Rs 116.44 billion, accounting for 66 per cent of its overall revenues. The mobile service business contributed 81 per cent to the operator’s Indian revenues.

The operator’s voice service revenues rose by 10.63 per cent from Rs 85.61 billion for the quarter ended December 2012 to Rs 94.71 billion for the same quarter in 2013. This was on account of an increase in voice tariffs as well as the withdrawal of promotional offers and discounts during the second half of 2013. On the upside, despite the voice tariff hike, minutes on the network increased by 6 per cent from 240.81 billion during October-December 2012 to 255.03 billion during the same quarter in 2013.

Tariff rationalisation and higher voice service usage resulted in improved voice ARPUs, which grew by 5 per cent from Rs 153 for the quarter ended December 2012 to Rs 161 for the corresponding quarter in 2013. The increase in voice tariffs led to a higher realisation per minute, increasing by 6 per cent year on year to Re 0.37 per minute for the quarter ended December 2013.

Data services also witnessed significant traction during the quarter ended December 2013. The data customer base grew by 31 per cent year on year to 41.48 billion as of December 2013. The number of 3G subscribers increased by 83 per cent from 5.18 billion in December 2012 to 9.48 billion in December 2013, accounting for 17.46 per cent of the operator’s data users. Growth in the subscriber base along with a reduction in data tariffs led to improved service uptake. Data traffic on the network increased by 97 per cent from 19.7 billion MB during the quarter ended December 2012 to 38.96 billion MB in the corresponding quarter in 2013. Higher data traffic resulted in improved ARPUs, which grew from Rs 47 to Rs 75 during the period under review.

International operations witness strong growth

International operations accounted for 34 per cent of Bharti Airtel’s total revenues. While the voice service segment’s performance was weak in the African market, the data services business witnessed strong growth. Voice usage per customer declined by 2 per cent year on year to 141 minutes during the quarter ended December 2013, which led to a 12 per cent decline in ARPU from $5.3 to $4.7.

Data services contributed 7.4 per cent of mobile revenues during the quarter ended December 2013, as compared to 3.9 per cent during the same quarter in 2012. The data subscriber base grew by 39 per cent from 14.1 million to 19.63 million during this period and data usage on the company’s network more than doubled. This resulted in a year-on-year ARPU growth of 39 per cent from $1.1 to $1.6.

In South Asia, the company performed better in the voice service segment, where the ARPU and realisation per minute increased by 7 per cent and 8 per cent year on year to $2.4 and $0.57 respectively for the quarter ended December 2013. Bharti Airtel witnessed 28 per cent growth in data usage per customer during the review period. However, its efforts to increase 3G penetration in Bangladesh were impacted by political uncertainty. This led to a 6 per cent decline in ARPU to $0.6 and a 27 per cent decline in realisation per MB to $0.32 during the quarter ended December 2013.

Future outlook

Bharti Airtel’s performance in the Indian market is expected to remain strong in the next few quarters, driven by an increase in data service uptake and tariff rationalisation in the voice service segment. The company’s efforts to pare debt will also help it reduce interest costs in the future.

On the international operations front, the African market is currently undergoing an important change in terms of operations and management. Further, greater political stability is expected in the African countries, which will benefit the company.

Bharti Airtel: Profit Upturn

After registering declining profits for 15 straight quarters, Bharti Airtel re-ported an improvement in its bottom line for the three-month period ended December 2013. The company’s net profits in-creased by 115 per cent from Rs 2.84 billion in the quarter ended December 2012 to Rs 6.1 billion for the corresponding quarter in 2013. Profits increased primarily on account of a 13.17 per cent decline in net finance costs from Rs 12.31 billion to Rs 10.68 billion during this period. The operator also reduced its debt from Rs 583.93 billion as of end-December 2012 to Rs 576.43 billion as of end-December 2013.  Meanwhile, the total revenue from operations grew by 13 per cent from Rs 193.62 billion for the quarter ended December 2012 to Rs 219.38 billion for the same quarter in 2013.

Indian operations continue to grow

During October-December 2013, Bharti Airtel’s revenues from its Indian operations stood at Rs 116.44 billion, accounting for 66 per cent of its overall revenues. The mobile service business contributed 81 per cent to the operator’s Indian revenues.

The operator’s voice service revenues rose by 10.63 per cent from Rs 85.61 billion for the quarter ended December 2012 to Rs 94.71 billion for the same quarter in 2013. This was on account of an increase in voice tariffs as well as the withdrawal of promotional offers and discounts during the second half of 2013. On the upside, despite the voice tariff hike, minutes on the network increased by 6 per cent from 240.81 billion during October-December 2012 to 255.03 billion during the same quarter in 2013.

Tariff rationalisation and higher voice service usage resulted in improved voice ARPUs, which grew by 5 per cent from Rs 153 for the quarter ended December 2012 to Rs 161 for the corresponding quarter in 2013. The increase in voice tariffs led to a higher realisation per minute, increasing by 6 per cent year on year to Re 0.37 per minute for the quarter ended December 2013.

Data services also witnessed significant traction during the quarter ended December 2013. The data customer base grew by 31 per cent year on year to 41.48 billion as of December 2013. The number of 3G subscribers increased by 83 per cent from 5.18 billion in December 2012 to 9.48 billion in December 2013, accounting for 17.46 per cent of the operator’s data users. Growth in the subscriber base along with a reduction in data tariffs led to improved service uptake. Data traffic on the network increased by 97 per cent from 19.7 billion MB during the quarter ended December 2012 to 38.96 billion MB in the corresponding quarter in 2013. Higher data traffic resulted in improved ARPUs, which grew from Rs 47 to Rs 75 during the period under review.

International operations witness strong growth

International operations accounted for 34 per cent of Bharti Airtel’s total revenues. While the voice service segment’s performance was weak in the African market, the data services business witnessed strong growth. Voice usage per customer declined by 2 per cent year on year to 141 minutes during the quarter ended December 2013, which led to a 12 per cent decline in ARPU from $5.3 to $4.7.

Data services contributed 7.4 per cent of mobile revenues during the quarter ended December 2013, as compared to 3.9 per cent during the same quarter in 2012. The data subscriber base grew by 39 per cent from 14.1 million to 19.63 million during this period and data usage on the company’s network more than doubled. This resulted in a year-on-year ARPU growth of 39 per cent from $1.1 to $1.6.

In South Asia, the company performed better in the voice service segment, where the ARPU and realisation per minute increased by 7 per cent and 8 per cent year on year to $2.4 and $0.57 respectively for the quarter ended December 2013. Bharti Airtel witnessed 28 per cent growth in data usage per customer during the review period. However, its efforts to increase 3G penetration in Bangladesh were impacted by political uncertainty. This led to a 6 per cent decline in ARPU to $0.6 and a 27 per cent decline in realisation per MB to $0.32 during the quarter ended December 2013.

Future outlook

Bharti Airtel’s performance in the Indian market is expected to remain strong in the next few quarters, driven by an increase in data service uptake and tariff rationalisation in the voice service segment. The company’s efforts to pare debt will also help it reduce interest costs in the future.

On the international operations front, the African market is currently undergoing an important change in terms of operations and management. Further, greater political stability is expected in the African countries, which will benefit the company.

Global LTE Forecasts

Worldwide LTE-related subscriptions reached 229.7 million in 2013, and will continually grow at a CAGR of 43.6% between 2013 and 2019, to exceed 2 billion, according to ABI’s latest research. By the end of 2013, LTE-TDD subscribers accounted for 5% of the LTE market, with 94.2% using Frequency Division LTE (LTE-FDD).

“Among the LTE subscription growth, Asia-Pacific contributes the most with a 49% market share. The second greatest contributor is North America with an 18% share,” comments Marina Lu, research associate at ABI Research.

ABI Research forecasts that LTE-Advanced subscribers will grow to 750 million in 2019 accounting for 37.3% of overall LTE subscribers. North America will be the most aggressive LTE-Advanced market, followed by Asia-Pacific and Western Europe. According to a 2012 forecast by Yankee Group, China, India, Europe, the U.S. will boast more than 134 million TD-LTE connections by 2016. Yankee also said China will have 106 million TD-LTE devices by 2016.

South Korean Operators, SK Telecom and LG U+, commercially launched LTE-Advanced networks in June 2013 and by the end of 2013, SK Telecom gained more than 1 million LTE-Advanced subscribers, or 10% of all its LTE subscribers,” adds Jake Saunders, VP and practice director. Some 800,000 TD-LTE base stations around the world will cover 3 billion people this year with 150 million LTE terminals expected to be sold this year, according to the Global TD-LTE Initiative. GSMA earlier said the combined LTE subscriber base (TD & FD) will pass one billion by 2017.

Global VoLTE subscriptions are expected to surpass 1.09 billion in 2019, of which 34.2% are from Asia-Pacific and 27% from North America.

Global LTE Forecasts

Worldwide LTE-related subscriptions reached 229.7 million in 2013, and will continually grow at a CAGR of 43.6% between 2013 and 2019, to exceed 2 billion, according to ABI’s latest research. By the end of 2013, LTE-TDD subscribers accounted for 5% of the LTE market, with 94.2% using Frequency Division LTE (LTE-FDD).

“Among the LTE subscription growth, Asia-Pacific contributes the most with a 49% market share. The second greatest contributor is North America with an 18% share,” comments Marina Lu, research associate at ABI Research.

ABI Research forecasts that LTE-Advanced subscribers will grow to 750 million in 2019 accounting for 37.3% of overall LTE subscribers. North America will be the most aggressive LTE-Advanced market, followed by Asia-Pacific and Western Europe. According to a 2012 forecast by Yankee Group, China, India, Europe, the U.S. will boast more than 134 million TD-LTE connections by 2016. Yankee also said China will have 106 million TD-LTE devices by 2016.

South Korean Operators, SK Telecom and LG U+, commercially launched LTE-Advanced networks in June 2013 and by the end of 2013, SK Telecom gained more than 1 million LTE-Advanced subscribers, or 10% of all its LTE subscribers,” adds Jake Saunders, VP and practice director. Some 800,000 TD-LTE base stations around the world will cover 3 billion people this year with 150 million LTE terminals expected to be sold this year, according to the Global TD-LTE Initiative. GSMA earlier said the combined LTE subscriber base (TD & FD) will pass one billion by 2017.

Global VoLTE subscriptions are expected to surpass 1.09 billion in 2019, of which 34.2% are from Asia-Pacific and 27% from North America.

India: We Need a $100 LTE Phone

The Global TD-LTE Initiative (GTI) held an International Summit at Mobile World Congress (MWC) this week. The organization advocates cooperation among global operators around TD-LTE and the coexistence of TD-LTE and LTE FDD standards.

TDD spectrum resources are available in many countries, mainly in the 2.3 and 2.6 gigahertz bands.

China Mobile plans to install 500,000 base stations across 340 cities by the end of this year and promote the evolution to LTE-A and increase the data rate from 100M to 200M, 400M or even 1G. China Mobile hopes to commercialize VoLTE by the end of 2014 and joined forces with South Korea’s KT to launch two-way global roaming service allowing interoperability between TD-LTE and FDD-LTE.

Gopal Vittal, CEO of Bharti Airtel India’s largest mobile carrier, said what the world needed was a good $100 LTE phone. India is also using Time Division LTE, but in the 2.3-2.4 GHz band.

During the summit, GTI showcased 5-mode 13-band terminals in collaboration with its industry partners. China Mobile plans to purchase more than 100 million LTE terminals and promote smartphones supporting 5 modes and 12 or more bands.

The GTI awards recognised the successful deployment of ZTE’s Cloud Radio Solution in Chinese TD-LTE commercial networks, and ZTE’s leading position in the global TD-LTE market.

NSN won a GTI Innovation award for its “Liquid Applications”, NSN’s thrust on bringing cloud to networking.

At the heart of Liquid Applications is the NSN Radio Application Cloud Server which deploys cloud technology, running on standard IT middleware. It provides processing and storage capabilities, together with the ability to collect real-time network data.

At MWC 2014, the WiMAX Forum announced a partnership with the Global TD-LTE Initiative aimed to guarantee WiMAX Advanced is compatible with TD-LTE.

GTI has 100 operator members and 73 partners. Under the promotion of GTI, 28 commercial TD-LTE networks have been launched around the world and more than 40 operator members are planning and constructing their commercial TD-LTE networks.