Vodafone-Idea Merger Is Now Approved; Find The Secret Of Airtel’s Stunning Profit in Q1 of 2018!

Airtel's unexpected profits have shocked the analysts. Is the position so bad?

Vodafone-Idea merger is now approved
Vodafone-Idea merger is now approved

Indian telecom’s biggest moment is here. Department of Telecom has approved the merger of Idea with Vodafone, thereby paving the way to create India’s largest telecom behemoth.

Meanwhile, Airtel has posted their results for Q1 of 2018. Analysts are shocked over the profits posted; and we will soon reveal the real reason behind it.

Read on to know more!

The Secret Behind Airtel’s Stunning Profit!

Airtel has just posted their financial results for Q1 of 2018 and the number are shocking.

Despite heavy losses, they have managed to post a profit of Rs 97.3 crore, which is 73.5% less compared to last year. However, the profits beat market expectations, as they were expecting a net loss. Airtel had posted net profit of Rs 367.3 crore last year for the same period.

The reason Airtel was able to post a profit is because of a deferred tax gain of Rs 515.6 crore, which they received in Africa.

Due to this reason, their net loss converted into net profit, and saved the day for them.

For the quarter ending June 30, 2018, Airtel performance worsened, as they balance sheet bled red. Their consolidated revenue dropped to Rs 20,080 crore, from Rs 21, 958 posted a year earlier.

However, there is a silver lining as well: If we compare data customers of Airtel, then there is something to cheer for them, as the number of users who use Airtel’s data increased by whooping 51.5% compared to last year, same quarter. As of now, Airtel has 94.78 million users of their data services.

As per analysts, Airtel’s wireless broadband business was worst hit in this period.

It would be interesting to observe how Airtel manages Jio’s disruption, and is able to sustain this profit in the next quarter.

Idea-Vodafone Merger Is Now Official!

After Vodafone and Idea reluctantly paid-up the last remaining dues of Rs  7,268.78 crore, Department of Telecom has now approved the merger of Vodafone and Idea Cellular.

The next step is the official filings with Registrar of Companies (RoC), after which Vodafone and Idea will officially announce the roll out of their services under a new brand name: ‘Vodafone Idea Limited’.

Share market cheered this news, as share prices of Idea increased by 4.57% at the close of yesterday’s trade.

We have already reported how this new combined entity, which will be India’s largest telecom company, can change the dynamics of telecom industry in India, even as 5000 jobs are at stake right now.

We will keep you updated, as receive more updates.

1 Comment
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