Airtel Q1 net up 24%; hopes to drive growth on rural users

Last Updated: Thursday, July 23, 2009 - 18:39

New Delhi: The country`s largest GSM
operator Bharti Airtel today dialed a 24 per cent rise in net
profit at Rs 2,517 crore in the April-June 2009, helped by
growth in rural customer numbers and foreign currency gains.

But the company`s revenue growth was affected by the drop in mobile termination charge to 10 paise and stiff
competition. The consolidated revenue for April-June quarter
grew 17.2 per cent year-on-year to Rs 9,942 crore as per US
accounting standards.

A foreign exchange gain of Rs 250 crore in the quarter,
as against a loss of Rs 168 crore a year ago, helped boost
profit. Meanwhile, shares fell 1.09 per cent to close trade at
Rs 813.90 on the BSE due to the prospects of revenue fall in
future due to competition.

Competition led to a drop in key parameters such as
average revenue per user and minutes of usage, its Deputy CEO
Sanjay Kapoor said.

Bharti added an overall 8.55 million customers, its
highest-ever for any quarter to date on a net basis. Analysts
said revenue grew softly as ARPU (average revenue per user)
and (average) MoU (minutes of usage) have fallen besides the
loss of income due to low mobile termination charges.

About 60 per cent of the company`s new users currently
come from the rural areas and the company expects this to
increase to 75 per cent, Bharti Airtel CEO & Joint MD Manoj
Kohli told reporters.

Bharti`s shares are valued at over USD 32 billion.

Bharti`s average revenue per user fell 20.6 per cent to
Rs 278 in April-June from a year ago and the minutes of usage
also fell 11 per cent to 478 minutes. Its margin improved to
42 per cent on higher profitability and EBITDA, a measure of
profitability, also surged to Rs 4,152 crore, a growth of 18
per cent.

Bharti`s Gupta said the company will be able to sustain
its growth in the next few years, as it was adding over 60 per
cent of its new users mainly in rural areas and small
towns — a key focus area for the company to increase
subscriber base.

The company, which is currently taking incremental
expansion of network, has announced it will have a capex of
USD 3.2 billion in the fiscal that includes USD 2.2 billion
for Bharti Airtel and USD 1 billion for its infrastructure
business.

"Our capex will be USD 3.2 billion same as last year",
Gupta said.

He said the company is not looking at the listing of its
infrastructure businesses -- Bharti Infratel or Indus Towers
(which is consortium between Vodafone, Bharti and Idea) not
for the next two to three years.

Bureau Report



First Published: Thursday, July 23, 2009 - 18:39

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