Tough times in the Indian telecom sector continued during 2018 with most operators and tower companies reporting declining incomes and profitability. Intense competition eroded operator margins and impacted ARPUs, while huge capex requirements for network upgrades and modernisation added to the pressure.
Between the quarter ended September 2017 and the quarter ended 2018, Bharti Airtel reported a decline of over 50 per cent in its profits. Idea Cellular’s losses increased significantly during the same period, largely on account of its recent merger with Vodafone India, which was completed in August 2018. Further, state-run Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) continued to be in the red and posted declining revenues. In contrast, Reliance Jio Infocomm Limited reported a healthy growth of over 50 per cent between the quarters ended September 2017 and 2018.
The slow growth in telcos’ revenues was reflected in the financials of towercos too, with Bharti Infratel reporting subdued revenue growth and declining profits.
Interestingly, fibre companies fared well financially as fibre finally gained ground in the telecom ecosystem. Companies such as Sterlite Tech, Himachal Futuristic Communications Limited (HFCL) and Birla Cables Limited reported an increase in profits during the period under consideration.
A look at the financial performance of select companies…
