Bharti Posts First Profit Rise in 4 Years, Lags Forecast
January 29, 2014 5:06 PM EST
Bharti Airtel(BRTI.NS), India's top phone carrier, missed expectations but still reported its first quarterly profit rise in four years as the embattled domestic market turns the corner after a years-long price war.
A worker cleans a logo of Bharti Airtel at its zonal office building in Chandigarh May 2, 2013.
Consolidated net profit more than doubled to 6.10 billion rupees from a year earlier , Bharti said on Wednesday, but was sharply lower than analysts' estimates of 10.44 billion rupees. Before tax-related one-off costs, net profit was 8.32 billion rupees.
Shares in Bharti, valued at about $20 billion, pared gains to trade up 0.5 percent at 0540 GMT after rising as much as 2.9 percent after the results were released.
Bharti and its main rivals in India, including the local unit of Vodafone Group Plc (VOD.L), last year raised voice prices for the first time in three years. They continue to cut discounts previously offered to lure customers in a highly-competitive market.
Carriers have seen benefits of reduced competition after several smaller rivals were forced by a court order to either shut down or scale back operations. There are still about a dozen players, but the top three telecoms now account for more than 70 percent of mobile industry revenue.
For graphic on Bharti financials, click link.reuters.com/xur46v
While Bharti's results show a turnaround in the domestic market, the company faces a serious challenge from a mobile spectrum auction starting February 3.
The auction is attracting interest from eight carriers, including cash-rich conglomerate Reliance Industries (RELI.NS). Bharti must buy new airwaves in the auction in at least two key cities it serves to continue operations there beyond 2014.
The entry by Reliance Industries may prop up bid prices and the company could challenge Bharti and others if it launches voice services, analysts say.
Bharti, which entered Africa in 2010 by buying $9 billion in
money-losing mobile phone assets, has yet to turn a profit there. It could sell its telecoms towers in Africa for up to $2 billion, which would help cut some debt, sources told Reuters last week.
Nearly a third owned by Southeast Asia's top phone carrier SingTel (STEL.SI), Bharti operates in 20 countries across Asia and Africa, but India is its main market, contributing about 70 percent of its revenue.
Mobile data services were growing fast in India and Africa, Bharti said in a statement. It said growth had returned to Nigeria, its largest African market.
Total revenue for the three months ended December rose 13 percent to 219.39 billion rupees, marginally lower than estimates.
Average revenue per user, a key metric for telecoms, rose 1 percent sequentially for both Bharti's Indian and African operations. Total voice minutes sold in India rose 1 percent from the previous quarter.
Most Popular Slideshows
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
- 2014 MLB World Series Game 3: Kansas City Royals 3, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Tesco Facing Crisis After Chairman Quits Citing Accounting Scandal In The Retail Giant
- Australian Federal Court Fines Reebok $350,000 & Orders Refunds For Shoe Endorsed By Miranda Kerr That Claims Unproven Health Benefits
- Perth Call Centre Staff Bad In English And Not Philippine And Indian Counterparts, Telstra Boss Says
- #Snapgate: iPad Air 2 Breaks While Undergoing Bend Test
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- Verizon Motorola Droid Turbo Leaked Live Images Surfaces, Scheduled To Get Unveiled On Oct 28
- Update HTC One M7 with LG G2 with Android 4.4.2 as Sprint OTA: Fixes and Installation
- U.S. Targets Buyers of ISIS Oil, Threatens Sanctions
- ISIS Syria Airstrike Bombing Has Killed 550 People, Civilians Included
- Russia Blocking OSCE Monitoring Of Its Border With Ukraine
- Russia Slams US 'Double Standards' In The Fight Against ISIS