Bharti Airtel Ltds subscriber growth and usage trends along with easing competition suggest the worst may be over for the industry,even as the firm recorded its thirteenth consecutive quarter of falling profits.
Bharti,the worlds fourth-biggest cellular carrier by customers,posted a worse-than-expected 50 per cent year-on-year drop in net profit to Rs 509 crore for its fiscal fourth quarter to end-March,capping a third straight year of declining profit for the company.
For the full year ended March,Bharti made Rs 2,276 crore,its smallest annual profit in seven years. Bharti shares fell about 5 per cent soon after the results were released,before recovering into positive territory. The fact is that pricing is becoming more stable,thats a positive going forward, Gopal Vittal,Bhartis India chief executive,told reporters on Thursday.
While earnings were hit by higher interest costs and a tax charge as well as continued losses in its Africa operations,several operating indicators showed improvement.
Average revenue per user (ARPU) in its core India operation was Rs 193 during the quarter,up 4 per cent from the prior three months,while total volume of minutes sold grew 5 per cent.
Market share gains along with the cull of competitors may embolden the big operators to cut discounts further and even raise voice call prices in a market that has not seen any meaningful price increases since a bruising price war in 2009.
Bharti,nearly one-third owned by Southeast Asias top phone carrier Singapore Telecommunications Ltd,said revenue for the March quarter rose 9.2 per cent to Rs 20,448 crore,lagging estimates marginally.
Operating margin improved to 31.7 per cent from 30.6 per cent in previous quarter. Bharti,which ventured into Africa in 2010 with a $9 billion acquisition of mobile phone operations in 15 countries,has yet to turn a profit there.
Bharti,which operates in 20 countries in Asia also said on Thursday it would buy the remaining 30 percent stake in its Bangladeshi unit from Warid Group for an undisclosed amount.