Sunil Mittal blames 8216;regulatory developments8217; for hurting Bharti Airtel

Country's largest telecom operator Bharti Airel today said stiff competition and "adverse" regulatory and tax developments in India impacted its margins and revenues.

Country8217;s largest telecom operator Bharti Airel today said stiff competition and 8220;adverse8221; regulatory and tax developments in India impacted its margins and revenues.

Bharti Airtel8217;s net profit declined by 37 per cent to Rs 762.2 crore in the first quarter of 2013,against Rs 1,215.2 crore in the same period last fiscal. This is the tenth straight quarter when the company8217;s profits have declined.

8220;Telecom revenues in India have been depressed due to hyper-competition and recent regulatory and tax developments,8221; Bharti Airtel Chairman and Managing Director Sunil Bharti Mittal said.

The company8217;s total revenues were up by 14 per cent at Rs 19,350 crore against Rs 16,975 crore in April-June 2011,helped by revenues from Africa and jump in mobile data revenues from India.

Bharti Airtel said its EBITDA earnings before interest,taxes,depreciation,and amortisation margin at 30.2 per cent was 8220;depressed due to the adverse regulatory and tax developments in India8221;.

It further said the revenues in India during the quarter were impacted by two significant changes 8212; Trai guidelines around processing fees which restricts the sales of 8220;combo packs8221; and hike in service tax from 10.3 per cent to 12.36 per cent,effective April 1,2012.

The hike caused all telecom services to become dearer by nearly 2 per cent,with the entire additional levy being borne by the exchequer.

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Bharti Airtel CEO Sanjay Kapoor,however,said during an investor call that an alternate strategy will be worked out to counter this impact.

Sustained hyper competition has driven this industry to become structurally defective with abnormally high rotational churn,the company said adding that the industry is witnessing high levels of gross customer additions resulting in net additions of less than 10 per cent.

This has a significant bearing on the telecom industry8217;s profitability,Bharti Airtel added.