Bharti Airtel, India's top mobile operator, beat forecasts on Thursday with a 34 percent rise in quarterly profit as it rode a boom in the world's fastest-growing wireless market, sending its shares up 5 percent.
Indian mobile operators have been adding more than 8 million subscribers a month, thanks to call rates of as low as U.S. 1 cent a minute and affordable handsets starting from $15, and as operators expand their network to smaller towns and villages.
The bulk of the new users are seen coming from the rural areas, where only one in 10 people has a phone, compared to a national average of about 25 percent.
"It has been a particularly strong quarter, with monthly customer adds crossing the 2.5 million mark," Chairman and Managing Director Sunil Mittal said in a statement. "This clearly demonstrates the Indian telecom growth story is intact and the rural markets are witnessing strong uptake. We are confident of continuing to lead this growth story."
Bharti, owned about 30 percent by Southeast Asia's top phone firm, SingTel, said consolidated net profit rose to 20.25 billion rupees ($484 million) in its fiscal first quarter ended June, from 15.1 billion a year earlier.
Revenue rose 44 percent to 84.83 billion rupees from 59.05 billion. That compared to a Reuters poll forecast of net profit of 19.34 billion rupees on revenue of 84.06 billion.
Shares in Bharti, which has a market worth of about $38 billion, were up 4 percent at 848.85 rupees in the afternoon session after having risen to as much as 861 rupees in a firm Mumbai market.
The number of mobile subscribers in India, the world's second-largest wireless market, jumped more than 56 percent in the year to May 31 to about 280 million and consultancy Gartner expects this to grow to 737 million by 2012.
China has about 575 million mobile subscribers.
Bharti provides mobile services on the popular GSM platform in all of India's 23 service areas, and accounted for nearly a quarter of the country's total mobile users.
Its average revenue per user fell to 350 rupees from 390 rupees a year earlier, even as minutes of usage climbed to 534 from 478 a year earlier.
The New Delhi-based firm mainly competes with No. 2 Reliance Communications and unlisted Vodafone Essar, controlled by Britain's Vodafone.
Both Bharti and Reliance had separately held talks with MTN Group, sub-Saharan Africa's largest mobile firm, for a combination that would have created a global top-10 telecoms firm, but neither clinched a deal.
Bharti's shares fell 12.6 percent between April and June, compared to a 14 percent drop in the main index.