Bharti improves employee efficiency even as ARPUs skid

By ET Intelligence Group

MUMBAI: India���s largest telecom company, Bharti Airtel Ltd has reported improved employee efficiency of its mobile services division during the March ���09 quarter at a time when cutthroat competition has reduced its realizations per subscriber.

The company���s per employee revenue of the mobile services division increased by 7.3% sequentially to Rs 10.5 crore during the March quarter. This became possible since the 3.6% jump in the segmental revenue came along with a 3.5% fall in employee headcount. The mobile services division, which accounts for 84% of total revenue, has seen a gradual decline in its headcount. At the end of March 09, Bharti���s mobile services division had 7,832 employees as against 8,452 a year ago.

For the March 09 quarter, the company declared lower than expected revenue growth. Net sales grew by 2% sequentially to Rs 9,824 crore, lees than ET Intelligence Group���s (ETIG) estimates of Rs 9,961 crore. Net profit rose by 3.7% to Rs 2,239.3 crore, slightly more than Rs 2204 crore estimated by ETIG.

A poll of six brokerages and ETIG had estimated sales of Rs 10,204 crore and PAT of Rs 2277.2 crore for the fourth quarter.

Bharti reported a faster sequential increase of 5% in cost of services compared to the rise in revenue. However, its impact on operating profit was muted since the company cut its selling and administrative expenses by 5%. As a result, operating profit remained almost flat at Rs 7,151.6 crore compared to the previous quarter.

On operational front, Bharti continued to report a fall in average revenue per user per month (ARPU) and minutes of usage per user per month (MoU). ARPU fell from Rs 324 a quarter ago to Rs 305 while MoU dropped from 505 minutes to 485 minutes by similar comparison. Compared to the year-ago levels, ARPU declined by 14.6% whereas MOU fell by 4.3%.

During the March 09 quarter, Bharti���s operating margin shrunk by 90 basis points (bps) to 40.7% due to lower margins in its mobile services and telemedia divisions. The margin of its enterprise division, which accounts for 9% of total revenue, shot up by 810 bps due to better realizations in carrier segment.