Bharti Airtel quarterly profit soars 89pc

April 29, 2014 - 5:39:54 pm

NEW DELHI: India's top mobile phone firm, Bharti Airtel, reported quarterly profit soared 89 percent from a year earlier, helped by an easing of cutthroat competition as rivals fell by the wayside.

But the company's African operations, purchased as part of Bharti's bold move four years ago to increase its global footprint, racked up more losses.

Bharti, the fourth-largest cellular firm globally by subscribers, said in a statement consolidated net profit for the fourth financial quarter to March climbed to 9.6 billion rupees ($159 million) on revenue that jumped 13.5 percent to 222.2 billion rupees.

"The year has ended on a satisfying note," Bharti India and South Asia managing director Gopal Vittal said, adding network, spectrum and IT investment "will enable sustained growth" in the region.

The profit increase broadly matched market estimates and marked a second straight quarter of earnings growth after Bharti clocked nearly four consecutive years of decline.

The company, controlled by billionaire Sunil Bharti Mittal and one-third owned by Singapore Telecommunications, operates in 20 countries.

Fierce tariff competition had pushed Indian call rates down to among the world's lowest. But a 2012 court ruling scrapping licences of some smaller firms over a scandal-tainted spectrum sale, reduced congestion and gave firms scope to raise call prices.

The number of telecoms players has fallen with just three firms -- Bharti, Vodafone and Idea Cellular -- accounting for nearly three-quarters of revenues and both Bharti and Vodafone bought more wireless spectrum in February to expand service.

Mobile data showed the strongest growth, soaring by 89.2 percent  with more Indians buying smartphones.

Industry figures show the number of smartphone purchases nearly tripled in 2013, making data services the new battleground as telecom firms try to boost revenues in an increasingly saturated call market.

In India, average revenue per user or ARPU, a key profitability measure, rose two percent for the quarter from a year earlier.

But in Africa, ARPU slid seven percent from a year ago as Bharti's Africa operations, bought for $10.6 billion in 2010 faced more headwinds.

International losses, encompassing the Africa business, more than doubled to 12.18 billion rupees before one-off balance sheet items.

"The quarter was impacted by the seasonal downturn in parts of Africa and regulatory interventions in Nigeria," Bharti Africa chief executive Christian de Faria said.

And while the India telecom sector is on a much firmer footing than a few years ago, it has failed to live up to its lucrative promise for some entrants.

Earlier this week, Japan's biggest mobile carrier NTT Docomo Inc announced plans to sell its 26.5 percent stake in an Indian telecom joint venture, Tata Teleservices, following five years of losses.

The biggest danger for Indian telecom players now, analysts say, is the looming entry of a new deep-pocketed rival, Reliance Jio Infocomm belonging to conglomerate Reliance Industries, controlled by India's richest man Mukesh Ambani. (AFP)