The entry of Reliance Jio has hit the country’s largest telecom services provider, Bharti Airtel, hard, with the company on Tuesday reporting a steep decline in its fourth-quarter profit.

The net income of the company nosedived to ₹373 crore in the fourth quarter ended March 31, declining 71 per cent, against ₹1,319 crore in the corresponding period the previous year.

The total revenue of the company also fell 12 per cent year-on-year to ₹21,935 crore during the January-March quarter, as against ₹24,960 crore in the same period last year.

India revenue for the fourth quarter this year (Q4’17) was reported at ₹17,036 crore, a drop of 7 per cent YoY, primarily led by mobile drop of 11 per cent YoY, the company said.

“The sustained predatory pricing by the new operator has led to a decline in revenue growth for the second quarter in a row. The telecom industry as a whole also witnessed a revenue decline for the first time ever on a full-year basis,” said Gopal Vittal, Managing Director and Chief Executive Officer, India and South Asia, Bharti Airtel.

“The mobile market remains turbulent in the current quarter as well, due to free offering by a new operator. We have added significant data capacities by rolling out +72,000 incremental mobile-broadband base stations versus last year,” the company said.

Mobile-broadband customers increased 20.5 per cent to 42.7 million, from 35.5 million in the corresponding quarter last year. Mobile-data revenues now contribute 21.5 per cent to India revenues vis-à-vis 23.3 per cent in the corresponding quarter last year, Airtel said.

The deteriorating health of the industry was compounded by the “tsunami” of incoming voice traffic from “the new operator” (Jio), as a result of which “significant investments had to be made just to carry the incoming traffic on its network,” Vittal said.

He added that “the net result of this was a revenue decline of 7.1 per cent in Q4 even as EBITDA margins eroded by 2.9 per cent. FY16-17 saw a muted top-line growth of 3.6 per cent vs the double-digit growth witnessed in preceding years.”

The company’s consolidated net debt has decreased to $14,094 million from $14,339 million in the previous quarter. Net debt excluding deferred payment liabilities to the Department of Telecommunications and finance lease obligations has decreased to $7,321 million from $7,650 million in the previous quarter, the company said.

High spectrum costs and consequent increase in associated amortisation costs has resulted in deterioration of Return on Capital Employed to 6.5 per cent from 8.3 per cent in the previous year, it said.

Meanwhile, the Board has proposed a final dividend of ₹1 per share (face value of ₹5 per share) for the financial year ended March 31, subject to approval by the shareholders (previous year: ₹1.36 per share).

Shares of Airtel closed at ₹345.50 on the BSE on Tuesday, down 1.64 per cent from the previous close.

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