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Bharti Airtel Q3 net profit slumps over 39% YoY; IUC cut, price war hurts

NEW DELHI: Bharti Airtel's third quarter net profit fell below estimates while slumping over 39 per cent on year – down for the seventh successive quarter – as lower interconnect charges (IUC) compounded the pressures on its voice and data business brought about by the rock bottom prices offered by Reliance Jio Infocomm.

Profit for Airtel – around 36 per cent owned by SingTel – fell to Rs 306 crore from Rs 504 crore a year earlier in the quarter ended December, the carrier said in the statement Thursday. The average estimate in an ET poll of analysts was Rs 455 crore. Profit in the July-September quarter was Rs 343 crore.

Consolidated revenue fell nearly 13 per cent to Rs 20,319 crore from a year earlier as data and voice rates fell. It was lower than Rs 21,777 crore in the quarter ended September.

"Regulatory fiat in the form of a cut in domestic IUC rates has exacerbated the industry ARPU decline in Q3'18. The recent announcement of reduction in International termination rates will further accentuate this decline and benefit foreign operators with no commensurate benefit to customers," Gopal Vittal, MD and CEO, India & South Asia, at Bharti Airtel, said in the statement.

He however added that continued investments in data capacities, strategic partnerships with content and handset providers and focus on customer friendly innovations like data rollover has led to healthy customer additions of 8.1 million during the quarter.

"Q3'18 has also seen the highest ever broadband site deployment of 32K in any quarter, complementing the robust data and voice traffic growth of 544 per cent and 50 per cent respectively on a YoY basis," he said.

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