Industry incumbents Vodafone Idea Limited (VIL), Bharti Airtel and Reliance Jio have reported their results for the quarter ended March 2019 and for fiscal 2018-19. The reported financials indicate some early signs of sector recovery and a potential upturn in revenues in the near future.

With Bharti Airtel and VIL focusing on minimum ARPU plans to weed out “missed call” customers, the blended ARPUs for these operators moved north. Airtel and VIL improved significantly on the ARPU metric, reporting a 20 per cent and a 17 per cent sequential increase respectively. Meanwhile, Jio’s ARPU declined by about 3 per cent. In terms of sequential income growth, Jio continued to lead the market while Bharti Airtel followed. India’s largest telco, Vodafone Idea, despite arresting its losses, lagged behind with almost flat revenue growth.

Vodafone Idea Limited

VIL’s gross consolidated revenue increased marginally from Rs 117.64 billion during October-December 2018 to Rs 117.75 billion during January-March 2019. Its net consolidated loss declined from Rs 50.05 billion to Rs 48.78 billion during the same period. The increased revenues and lower losses can be attributed to the various strategic initiatives taken by the operator post merger. A key initiative was the introduction of service validity vouchers in October-December 2018, which required customers to make a minimum recharge of Rs 35 (28 days validity). The move resulted in a sequential stabilisation of revenues, as a result of which, the average daily revenue (ADR) for the quarter under consideration grew by 2.3 per cent quarter on quarter, after witnessing a successive decline in the 11 preceding quarters. This also helped VIL increase its blended ARPU by 16.3 per cent, from Rs 89 to Rs 104, during the period under consideration.

Meanwhile, the merger synergies are finally kicking in with the total operating expenses (excluding licence fees, spectrum usage charges, and roaming and access charges) declining from Rs 106.28 billion in the quarter ended December 2018 to Rs 99.89 billion in the quarter ended March 2019. This is attributable to accelerated network integration – removal of surplus equipment on 24,000 sites (out of the total 67,000 co-located sites) and exit from 9,900 low-utilisation sites. VIL’s earnings before interest, taxes, depreciation and amortisation (EBITDA) increased from Rs 11.37 billion to Rs 17.85 billion on a quarter-on-quarter basis.

The pro-forma capex spend for 2018-19 stood at Rs 102.2 billion. The gross debt as of March 31, 2019 stood at Rs 1,259.4 billion (including deferred spectrum payment obligations of Rs 906.8 billion due to the government).

On the operations side, VIL added 5.4 million 4G customers during the quarter, taking its overall 4G subscriber base to 80.7 million. The overall broadband subscriber base stood at 110.2 million. The total data volume grew by 9 per cent over the last quarter, to 2,947 billion MB. The total minutes on the network declined by 1.3 per cent during the same period, due to a reduction in incoming minutes following the disconnection of “incoming only” or “low-ARPU” customers. During the quarter, the company added 8,915 4G TDD sites to augment capacity and deployed massive MIMO on around 2,000 sites in select locations.

Meanwhile, VIL recently completed its rights issue raising Rs 250 billon. The public component of the issue was subscribed 1.2 times with strong participation by public shareholders (ex-promoters). The company is also exploring options to monetise over 158,000 km of intra-city and inter-city fibre.

(The merger of Vodafone India with Idea Cellular was completed on August 31, 2018. As such, the consolidated financials reported for the quarter ended March 2019 are not comparable to those reported in the corresponding period in 2018.)

Bharti Airtel

Bharti Airtel’s consolidated net profit increased by around 37 per cent on a year-on-year basis, from Rs 4.19 billion during the quarter ended March 2018 to Rs 5.76 billion during the corresponding quarter in 2019. Further, the operator’s consolidated revenue increased by around 6 per cent, from Rs 193.94 billion to Rs 206.02 billion during the period under consideration. However, the EBITDA declined from Rs 70.05 billion to Rs 66.86 billion during the same period.

The company’s revenue from its India operations (mobile services) increased by around 3 per cent, from Rs 103.53 billion during the quarter ended March 2018 to Rs 106.32 billion during the quarter ended March 2019. For its Africa operations, Airtel reported an increase of around 6 per cent in its total revenues, from $736 million to $781 million during the same period.

For the full year ended March 2019, Airtel’s revenues stood at Rs 807.8 billion, a decline of 2.24 per cent over the Rs 826.38 billion reported during 2017-18. Meanwhile, its total profit declined from Rs 21.83 billion in 2017-18 to Rs 16.87 billion in 2018-19.

The company has launched a rights issue (balance sheet date May 3, 2019) of approximately 1,134 million fully paid-up equity shares (of a face value of Rs 5 each) at a price of Rs 220 per share, aggregating Rs 249.39 billion. The rights issue is currently under way and will close on May 17, 2019.

(Bharti Airtel’s quarterly report for the fourth quarter and the year ended March 31, 2019 will be released upon completion of its rights issue process.)

Reliance Jio

Reliance Jio ended the year 2018-19 on a strong financial footing. The company’s operating revenue increased by 55.8 per cent, from Rs 71.28 billion in the quarter ended March 2018 to Rs 111.06 billion during the corresponding quarter in 2019. Meanwhile, its stand-alone net profit witnessed a 64.7 per cent increase, from Rs 5.1 billion to Rs 8.4 billion during the same period. The EBITDA grew by 60.7 per cent from Rs 26.94 billion to Rs 43.29 billion.

Meanwhile, the transfer of Reliance Jio’s fibre and tower assets to two special purpose vehicles majority controlled by the Digital Fibre Infrastructure Trust and the Tower Infrastructure Trust respectively was completed in March 31, 2019. The transaction has led to the deleveraging of Jio’s balance sheet, with a liability reduction of close to Rs 1,070 billion. All future capex on passive infrastructure assets will be undertaken by the two new entities. Jio has entered into long-term usage agreements as anchor tenant for these assets.

On the operations side, the average data consumption per user per month on Jio’s network stood at 10.9 GB and the average voice usage stood at 823 minutes per user per month. Video consumption, which increased to over 5 billion hours per month, drove most of the data usage. The company’s ARPU during the quarter stood at Rs 126.20 per subscriber per month.

As for the full-year results, Jio’s operating revenue increased by 92.7 per cent, from Rs 201 billion during 2017-18 to Rs 388.38 billion during 2018-19. Its EBITDA more than doubled from Rs 67.34 billion to Rs 151.02 billion. Net profit increased from Rs 7.23 billion to Rs 29.64 billion.


After several quarters of financial upheaval, the near-term outlook for the sector is finally looking up. According to Fitch Ratings, the industry revenue is expected to rise by 5-10 per cent in 2019 on account of easing competition and growing data traffic with the proliferation of affordable 4G handsets. Blended ARPUs are expected to rise by 10-20 per cent to $1.6-$1.7 per month in 2019, underpinned by the introduction of a minimum mobile tariff and growing data use. The three private telcos are likely to bundle value-added services to drive up tariffs in the coming quarters. The industry finally seems to be treading on the path to profitability.

Akanksha Mahajan Marwah