Country's largest telecom firm Bharti Airtel on Tuesday reported its lowest quarterly profit in four years as net earnings fell 72 per cent in January-March, hit by "sustained predatory pricing" by rival Reliance Jio.
The net profit in the quarter ended March 2017 stood at Rs 373.4 crore (or Rs 0.93 a share), nearly a fourth of the Rs 1,319.2 crore (or Rs 3.30 a share) notched in the year-ago period. The company announced the results after market hours.
Billionaire Sunil Mittal-headed company blamed rival Jio for the lowest profit since the January-March quarter of 2013 and said the "sustained predatory pricing" by the new entrant was responsible for the drop in annual revenue of the entire telecom industry.
The "deteriorating" health of the industry was compounded by the tsunami of incoming traffic from the new operator, said Bharti Airtel MD and CEO (India and South Asia) Gopal Vittal.
He added that "significant investments had to be made just to carry the incoming traffic on our network".
Bharti, which has been locked in an intense war of words with Jio over free offers, is the first telecom company to report its fourth quarter earnings, setting the tone for the industry.
The third largest operator Idea Cellular is slated to announce its results on May 13. Vodafone, the country's second largest operator, is not listed in India but is expected to share its financials later this month.
Bharti Airtel -- which has 372.4 million customers in 17 countries -- saw its total revenue decline by 12 per cent during the fourth quarter to Rs 21,934.6 crore from Rs 24,959.6 crore in the same period last fiscal.
"The consolidated year-on-year revenue growth muted by 3.2 per cent on account of Nigeria currency devaluation," the company said in a statement.
For the full year 2016-17, net income fell 37.5 per cent to Rs 3,799.7 crore, while revenue was lower by 1.1 per cent to Rs 95,468.4 crore as compared to the previous fiscal.
During the year, Bharti Airtel had announced the acquisition of India operations of smaller rival Telenor and Tikona to further strengthen its footprint in the country.
Giving a geographical break-up, Airtel said its India revenue fell 7.1 per cent while Africa revenue was up 2.6 per cent year on year. Its consolidated mobile data revenue at Rs 3,686 crore was down 14.6 per cent year-on-year.
Bharti Airtel, which also offers DTH and broadband services, said the mobile data traffic on its network had seen a growth of over 56 per cent to 271 billion mega bytes during the quarter. The company's board has proposed a final dividend of Re 1 per share for the financial year ended March 31.
The Indian telecom industry, over the last few months, has seen a turmoil. Reliance Jio, controlled by India's richest man Mukesh Ambani, had launched its inaugural free voice and data plan in September last year.
In December, it extended the freebies up to March 2017, much to the ire of other operators who believe that such offerings not only hurt their profitability but are also against the regulations.
Even after the launch of its paid services post March, Jio continues to be aggressive, offering data at rock-bottom prices while voice calls are free. This has forced other operators including Airtel to drop prices, putting additional pressure on their earnings.
The industry currently owes close to Rs 4.60 lakh crore to various financial institutions and banks, as per estimates.