Bharti Airtel posts 30 percent increase in Q3 profit


New Delhi : Telecom major Bharti Airtel Thursday reported a 30 percent increase in its cash profits to Rs.37.55 billion ($767 million) in the third quarter ended Dec 31 as against Rs.28.82 billion a year ago.

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The consolidated total revenue for the quarter under review grew 38 percent to Rs.96.33 billion. The net income was reported at Rs.21.59 billion, a growth of 25 percent over last year.

“It’s our belief that this growth is sustainable, and is not by accident,” Bharti Group deputy chief executive Akhil Gupta told reporters here.

“Airtel is today present in over 400,000 towns and villages. We are covering roughly 80 percent of the population of this country under our network coverage and that means it is an extremely inclusive growth,” he added.

Bharti had 88.3 million subscribers as on Dec 31, 2008, an increase of 54 percent from the same date the year before. It has maintained its leadership position through an improved market share of wireless subscribers across India at 24.7 percent as compared to 23.6 percent the year before.

The company’s non-voice revenue, however, saw a drop in the third quarter, with the segment contributing only 14.5 percent to the mobile revenue as against 15.1 percent in the year-ago period.

“We have tried to improve the hygiene of value-added service (VAS) for our customers, which has resulted in non-voice revenue dropping to 14.5 percent. However, they will pick up soon,” Gupta said.

Asked about the threat from new entrants in the GSM field, who offer lucrative offers like free talk time, Gupta said: “No free business models work for life. A limited time period gimmick will settle down with time.”

The monthly churn for Airtel has remained almost flat at 1.1 percent in the post-paid category and it has come down to 2.9 percent from the earlier 3.2 percent in the pre-paid segment.

However, the company’s SMS revenue declined to 4.1 percent. “The dependence on SMS should come down with growing popularity of cheaper call rates,” Gupta said.

The company has earmarked $5 billion as capital expenditure for the next fiscal for mobile services and tower business. However, it excludes the expenditure that will be incurred in the third generation (3G) mobile services auction.

The company launched services in Sri Lanka last month and had also bid for licence in Iran, which it lost to the UAE-based telecom giant Etisalat.

Bharti’s scrip was up 6.58 percent Thursday over its previous close of Rs.622.