The immediate trigger for the stock, however, was the 14 per cent jump in ARPU on a sequential basis. The metric at Rs 154, led by the tariff hike in December, was the highest in 12 quarters. This helped the company report a 10 per cent uptick in its India business and an 8 per cent increase at the consolidated level. India accounts for three-fourths of Bharti's consolidated revenues.
With wireless subscribers almost at the same level as in Q3FY20, revenue growth for the India mobile business on a sequential basis was driven entirely by the increase in ARPU. Most brokerages had expected 7-10 per cent sequential growth in ARPU. Bharti's wireless segment operational performance was better than Reliance Jio, according to G V Giri and Balaji Subramanian of IIFL Securities.
"Adjusted for interconnect usage charge (IUC), we estimate Bharti’s service revenue growth to be upwards of 16 per cent, as compared to the estimates for Reliance Jio’s service revenue growth of 4.7 per cent." The outperformance came in despite a fall in IUC revenues, as Jio charges on off-net calls after given talktime; 4G data plans of Bharti offer unlimited voice calls. Jio had reported a 1.7 per cent quarter-on-quarter (QoQ) increase in the ARPU in the March quarter, to Rs 130.6. While analysts had expected Bharti to post better ARPU growth than Jio given the former has a lower proportion of subscribers on longer duration plans, the extent of the ARPU increase came as a surprise, says IIFL Securities.
At 283 million, Bharti's mobile subscriber base in India remained flat. But there had been a robust 10 per cent rise in its 4G subscriber base to 148 million. The share of 4G customers crossed the half-way mark for the first time and given the price hike, this growth came in the higher tariff bracket.
Bharti's data traffic, too, witnessed appreciable growth of 16 per cent sequentially, as compared to 6 per cent growth for Jio.
While Bharti's India wireless operating profit growth was up 27 per cent sequentially, it was below estimates, given a 7.7 per cent increase network operating costs. Besides, sales and general and administration costs, as well as employee cost (up 7-10 per cent), dented the gains at the operating level.
Despite the uptick in revenues and growth in operating profit, a slew of one-offs, especiallyRs 5,600 crore towards regulatory costs (spectrum charge), led to a fourth consecutive quarter of loss for the company. Exceptional costs at Rs 7,512 crore dented the bottom line, which came in at Rs 5,237 crore.