Bharti Infratel, the telecom tower company from the Bharti group, reported a modest 4% growth in sales and 2% improvement in net profit due to a loss of tenancies as well as increasing fuel costs.
The company’s revenue rose 4.2% on year to Rs 1,673 cr in the fourth quarter, which, however represented a decline of 1.4% compared to the third, or immediately preceding quarter.
Net profit was higher by 2% on year at Rs 606 cr. In the preceding quarter, net profit was Rs 585 cr.
The company said it lost about 10% of its nearly 2 lakh tenancies or client-locations during the last financial year due to the shut down of telecom operators after the entry of Reliance Jio.
“The year gone by saw unprecedented consolidation in the Indian telecom industry with five operators ceasing to exist either on account of mergers or outright shut down of operations,” said Chairman Akhil Gupta.
“Our Company saw loss of 22,134 co-locations on this account during the year.”
However, the company did not report the kind of big losses that its telecom clients were forced to report due to the hyper-competition in the market.
Like other tower companies, Bharti Infratel has long-term antenna-hosting deals with its clients. Even if a client shuts down its mobile operations, it must still may the company much of what it owes for the remainder of the contract period.
Gupta pointed out that the stable finances of the company “bears testimony to a sound business model and our leadership position” in the market.
Infratel is expected to benefit from demand for 4G network, but this would be offset by further reduction in tenancies on account of the merger of Vodafone and Idea as well as the swapping of single-technology base stations with those that support multiple technologies at once.
“We believe that with rapidly growing data demand which would require large network rollouts, we are poised for a strong potential in the coming years. We are fully prepared to exploit this and meet all requirements of our customers for speedy rollouts,” Gupta added.