Bharti Airtel profit falls for ninth straight quarter

Reuters: Bharti Airtel, India’s biggest mobile phone carrier by subscribers, reported its ninth straight quarterly profit decline, hurt by intense price competition, higher interest costs and foreign exchange fluctuation losses.

The company, controlled by billionaire Sunil Mittal, has lost market share in the past year to smaller rivals in the country’s fiercely competitive mobile market, where carriers operate on wafer-thin margins with cheap voice calls accounting for a bulk of revenue.

Mobile data, which offer higher margins, is at a nascent stage in India, and the take-off of premium Third-Generation (3G) data services have been slower than what the industry had initially expected in a price-sensitive market.

Cellular operators, including Vodafone’s local unit, have also been hit by fresh uncertainty in recent months after a court ordered cancellation of all mobile phone permits awarded in a scandal-tainted sale in 2008.

“The recent regulatory developments in India will have significant implications on the future of telephony and broadband, as well as India’s global competitiveness,” Chairman Sunil Mittal said in a statement.

The company expects consolidated capital expenditure of between $ 3 billion and $ 3.2 billion for the current fiscal year that started in April, excluding any potential payment for spectrum, said Sarvjit Singh Dhillon, Group Chief Financial Officer at the mobile operator’s parent Bharti Enterprises.

Bharti, nearly a third owned by Southeast Asia’s top phone carrier SingTel, said consolidated net profit fell to 10.06 billion rupees in its fiscal fourth quarter ended March from 14 billion rupees a year earlier.

The company reported foreign exchange losses of 1.82 billion rupees in the quarter.

Consolidated revenue rose 15 per cent to 187.29 billion rupees for Bharti, which had 241.1 million mobile customers at end-March.

Monthly average revenue per user (ARPU), a key gauge for telecoms carriers, fell an annual three per cent to 189 rupees for its Indian operations. ARPU for its African operations fell five per cent to $ 6.8.