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Bharti Bounds Towards 50m Mobile Subs As Profits Double
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Bharti-Airtel is India's largest mobile operator with a customer base of 42.7m at the end of June 2007, 85% up over the year and 15% up in the second quarter. The three months to June - which form the first quarter of Bharti's financial year - saw net additions of over 5.5m, compared to just under 3.5m over the same period in 2006. Furthermore, the operator has consistently outperformed the Indian market in each of the last fourteen months, raising its market share from 21.3% in April 2006 to 24.1% in June 2007.
Bharti is on course to break the 50m customer barrier in October this year - possibly even in September with a favourable wind - becoming only the eighth operator in the world to do so, after China Mobile, China Unicom, DoCoMo, Verizon Wireless, AT&T Wireless, SprintNextel and MTS Russia. In the process, incidentally, it will overtake Vimpelcom in Russia to become the world's eighth largest operator by customer numbers, and will have MTS, DoCoMo and Sprint in its sights very soon afterwards.
As well as achieving impressive raw customer growth, Bharti's other indicators look positive. Despite a quarter on quarter increase from 3.6% to 4.0% per month, prepaid churn still remained lower than in any other period on record, whilst the less significant postpaid churn rate weighed in at an acceptable, if not impressive, 3.6%. Average voice minute usage rose, as it has down in every quarter for more than three years, from 475 minutes per month to 478, although this did not prevent another 4% quarter on quarter decline in ARPU to Rs390 per month as the average price of a voice minute fell from Rs0.77 to Rs0.74 between March and June (see IDEA Cellular Q1 2007/08 Results to 30th June 2007). Over the year the decrease in ARPU was nearer 12%, but the increase in customers ensured a 65% increase in revenues in the mobile business to Rs46.98bn - around 80% of the group total. More importantly, mobile EBITDA improved exactly in line with the customer base, registering an 85% improvement between Q1 2006/07 (Q2 2006) and Q1 2007/08 (Q2 2007), implying an improvement in the margin from 36.4% to 40.6%, whilst the operating profit was up 91%.
Bharti does not disclose its net profits by business unit, but the fact that there was a 100% improvement year on year for the group as a whole indicates the kind of phenomenal growth which this business is producing.
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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Tags: [china unicom] [docomo] [mts] [wind] [vimpelcom] [idea cellular] [churn]
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