Home » Telecom » Airtel, Idea Profits Surge On High Mobile Data Usage. Low Profits Due To OTTs Theory Debunked
Last updated: April 29, 2015 at 12:55 pm

Airtel, Idea Profits Surge On High Mobile Data Usage. Low Profits Due To OTTs Theory Debunked

Revenue Growth Airtel

One of the major arguments proposed by telecom players supporting their discriminatory Internet plans was revenues. They claimed that they have invested heavily into telecom infrastructure and due to the OTT players, their revenues are dropping; hence they justified their anti-net neutrality plans for balancing it off.

But these claims of low profits have been totally debunked now as both Airtel and Idea, which are India’s top telecom companies have reported record profits for the quarter which ended in March, 2015.

And the majority of this increased revenue came from mobile data usage!

Airtel:

Sunil Mittal led Bharti Airtel announced their quarterly report for the period January-March 2015, and there is no reason they should seek shelter of decreased profits to impose anti-net neutrality plans.

Airtel Mobile Data Growth

As per the records, their net profit increased by 30.5% to reach Rs 1255 crore. In the same period last year, they had net profits of Rs 962 crore. Total revenues for this period stood at Rs 23,016 crore, which is again 3.6% more than Rs 22,219 crore revenues for the same period last year.

If we analyze the annual revenues then again Airtel has posted record growth. Compared to Rs 2773 crore of net profit in the financial year 2013-14, Airtel posted net profit of Rs 5183 crore for the financial year 2014-15, which is an increase of whooping 86.9%. Revenues also increased 7.3% to reach Rs 92,039 crore this year.

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Now the most interesting part: Revenues from Data Usage on Mobile.

Total revenues which Airtel clocked for the mobile usage during the period January-March 2015 was Rs 3085 crore, which is an increase of 59.1% compared to the same period last year. As this data contain Africa’s revenues as well, we will focus only on India, and now, its even more.

For Indian mobile data usage, their revenues increased 70% to reach Rs 2324 crore. Airtel’s Indian customers are now using more data than voice. Average Revenue Per User (ARPU) for data usage increased to Rs 176 from Rs 43 last year, which is an increase of 309%!

Data usage per customer increased to 41.2%. Overall, Internet usage accounted 17.6% of overall revenues for Airtel, up from 11.5% last year.

We are still not able to understand why Airtel is trying to kill this Golden Goose, which is only increasing in its size, every year. Airtel Zero will only contribute to finish this data usage, as the options would reduce, and users would feel trapped.

Idea:

Idea Cellular’s results for the quarter ending March is mirroring Airtel’s results.

Overall, their consolidated net profit stood at Rs 941.8 crore against Rs 589.9 crore in the same period last year; hence an increase of 60% YoY. The revenues increased to Rs 8422.5 crore, an increase of 19.5% compared to last year.

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Data usage on Idea’s network exploded in this quarter, as their users consumed 18.3% more data compared to last year. Total of 54.5 billion Mega Bytes were consumed during the last quarter as revenues from Internet usage increased to 24.5%, compared to 16.5% last year.

ARPU of Idea Cellular now stands at Rs 179, one fourth of which comes from Data!

As evident by the quarterly results of Airtel and Idea, data usage is now at an all time high. And the major reason for the same is fair Internet accessibility. Users are free to choose and access the website which they want and love, and that is why they are consuming Internet like never before.

Once they have the restriction of free access to few websites and paid access to the rest, then not only the overall data consumption will decrease, they will start avoiding Internet as a whole.

And this can put some severe dent in telecom player’s growth plans.

[Header Image: Shutterstock.com]

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