Telecom heavyweight Bharti Airtel posted its lowest quarterly profit in around 15 years for the quarter ended March 2018. The company’s profits saw a steep fall to Rs 83 crore from Rs 373 crore in the same period last year. Sequentially too, profits saw a 73% drop from Rs 306 crore in Q3 FY18. Average revenue per user (ARPU) too fell 27% YoY to Rs 116.

The sharp fall in profits can be largely attributed to the ongoing price war in the telecom space, spurred by aggressive pricing from new entrant, Reliance Jio. Mukesh Ambani’s telecom foray has been giving incumbent players sleepless nights, adding subscribers at a rapid pace with the lure of bottomed out prices and free data.

Recent data from the telecom regulator showed the company added nearly 87 lakh subscribers in February 2018 alone, the highest since February 2017, taking the total users to a whopping 17.7 crore.

Apart from the Jio effect, other factors that could have caused pain for Bharti Airtel in Q4 are the recent cuts in interconnect usage charges and international termination charges. The telecom regulator cut interconnect usage charges by 57% with effect from October last year, and international termination charges by 43% in February, boring another hole in the already bleeding pockets of telecom companies.

Some analysts had expected Bharti Airtel to post a net loss for Q4, which did not happen. However, a closer look at Airtel’s Q4 numbers reveals that the company posted a loss of around Rs 482 crore in India mobile services segment compared to a profit of Rs 1,439 crore in the same quarter last year. What seemed to have helped the company is a Rs 1,055 crore profit in the Africa mobile services segment, a massive improvement from last year’s Rs 393 crore.

However, the road ahead for Airtel may not be as bleak as the Q4 numbers seem to suggest. Going by recent notes from brokerages, it seems that a recovery is likely in the coming quarters. In a note recently, India's leading online share trading company Motilal Oswal said it expects Bharti Airtel’s consolidated EBITDA to grow 1% in FY19, but recover to 18% in FY20.

The note went on to predict that once the flux in the industry settles with the completion of the Idea-Vodafone merger, only three large players would remain: Bharti Airtel, Vodafone-Idea and Reliance Jio. In such a scenario, the brokerage firm believes price undercutting would be phased out and ARPUs would become accretive.

Bharti Airtel’s stock fell 2% in early trade on Tuesday, but recovered in the last hour, closing 0.61% in the green at Rs 406.10.

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