Bharti posts first net profit on the back of pre-paid push

26 Apr 2004

Bharti Televentures, India’s largest GSM provider and number two cellco overall, has confounded analysts’ expectations to report its first ever full-year profit on the back of a 64% rise in sales. Net profit for the twelve months to the end of March 2004 was INR6.19 billion (USD140.3 million), compared with a loss of INR1.34 billion (USD30.4 million) a year earlier. Bharti’s customer base more than doubled over the fiscal year, pushing revenues up to INR50 billion (USD1.13 billion) and finishing March 2004 with 6.5 million subscribers; the bulk of its new customers were pre-paid users, which accounted for around 79% of its total base. Intense competition in India’s flourishing market has seen price cuts across the board, resulting in Bharti’s average revenue per user (ARPU) for pre-paid customers falling from INR349 in its fiscal 2002 to INR337 a year later; post-paid ARPU also fell significantly, from INR1,326 to INR1,128.

There were 33.28 million mobile users in India at the end of March 2004, according to official figures from the Cellular Operators Association of India (COAI) and the Association of Basic Telecoms Operators (ABTO). Of the total, around 26.13 million are signed up to GSM-based services and 7.15 million to the rival CDMA platform. Bharti led the pack in the GSM sector, followed by BSNL, Hutchison, Idea Cellular and BPL. In the CDMA segment Reliance leads ahead of Tata Teleservices. CDMA figures relate to limited mobility; they do not take account of the rapidly expanding wireless in the local loop (WiLL) market in which both Reliance and Tata are prominent players.

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