Bharti Airtel, the parent company of Airtel Nigeria, has been tipped by financial analysts in India to record its first loss in more than 15 years for the three months to end-March, as the impact of a price war in its home market continues to erode the bottom line. This is despite analysts saying its African unit was likely to post improved results.
The Economic Times of India reported comments from brokerage Kotak Securities tipping the operator’s earnings to slip into the red with an INR3.8 billion ($58.4 million) net loss for the quarter – its fiscal Q4.
This compared to an INR3.73 billion profit in the same period in 2017 and is a continuation of a steady decline in earnings since the entry of low-cost competitor Reliance Jio in India during 2016. Bharti Airtel’s last quarterly loss was in the three months to end-December 2002, the newspaper said.
Although the company is tipped to report decreased revenue and net earnings in its home market, Kotak Securities noted its Africa unit was likely to post improved figures.
The projected hit to Bharti Airtel’s India performance comes amid the huge change in the country’s mobile landscape, attributed to the entrance of Reliance Jio and the subsequent price war.
In November 2017, Sunil Bharti Mittal, Bharti Airtel chairman, said the country’s operators had already written off $50 billion of investment since the challenger’s launch.
In moves partly attributed to intense competition, Vodafone India and Idea Cellular are in the process of merging, while another operator, Aircel, has filed for bankruptcy just as Reliance Communications is attempting to sell-off assets to reduce its massive debt pile while also fighting off creditor litigation.