Bharti Quarterly Profit Falls on High Interest Costs
Bharti Airtel, the world's fifth-biggest mobile phone carrier by subscribers, reported a 22 percent fall in quarterly profit — its eighth straight quarter of declining profits — hit by higher interest costs and losses on currency fluctuations.
The sector's profitability has been squeezed after the entry of the new operators triggered a vicious call-price war. Market leader Bharti and some of its rivals raised call prices in the middle of last year, which was the first such increase in at least two years.
India's older mobile phone carriers such as Bharti and Vodafone's local unit are seen as major beneficiaries of a court ruling last week to revoke licenses given to newer companies in a scandal-tainted 2008 sale, which is likely to reduce competition in the crowded 15-player market.
Bharti ventured into Africa in 2010 by acquiring most of the African operations of Kuwait's Zain in a $9 billion debt-funded deal. But high costs there mean margins are weaker compared with India and Bharti has yet to turn a profit in the continent, although the operations are improving.
Shares in Bharti fell as much as 4.4 percent after the earnings on Wednesday in a slightly firm Mumbai market.
Bharti, controlled by billionaire Sunil Mittal and also nearly a third owned by Southeast Asia's biggest phone firm SingTel , said consolidated net profit fell to 10.11 billion rupees ($206 million) for its fiscal third quarter ended December from 13.03 billion rupees a year earlier.
The results were based on international accounting standards.
Revenue rose 17 percent to 184.77 billion rupees.
Brokerages had expected a 3.2 percent rise in net profit to 13.45 billion rupees on revenue of 184.54 billion rupees for the New Delhi-headquartered company that had 243 million customers as of December in 19 countries across Asia and Africa.
Monthly average revenue per user (ARPU), a key metric for telecom carriers, from Bharti's Indian operations fell an annual 6 percent to 187 rupees for the quarter. Africa ARPU were nearly flat at $7.1.