Bharti 2Q net profit up 13%, rise less than expected as competition increases

30 Oct 2009

India’s largest mobile operator by subscribers, Bharti Airtel, has posted a 13% year-on-year increase in quarterly net profit for the three months ended 30 September 2009. The cellco reported net profit for the three-month period at INR23.2 billion (USD480.2 million), up from INR20.5 billion in the same period a year earlier, although the growth was lower than expected; it is thought that the effect of increased competition in the Indian wireless sector, coupled with a rise in the number of lower spending subscribers, contributed to the weaker-than-expected increase. While Bharti’s mobile subscriber base increased 43% year-on-year to 110.5 million, average revenue per user (ARPU) fell 24% y-o-y to INR252, while average minutes of use dropped to 450 at end-September 2009 compared to 526 a year earlier.

Group revenue in the company’s second fiscal quarter rose 9% to INR98.5 billion, while earnings before interest, tax, depreciation and amortisation (EBITDA) rose 15% against the same period a year earlier, reaching INR41.4 billion.

Commenting on the results, Sunil Bharti Mittal, chairman and managing director of Bharti Airtel, said: ‘Bharti Airtel has once again demonstrated its strong fundamentals and its resilience. We continue to maintain our market leadership position in the mobile segment, despite ever-increasing competitive intensity…In the near term, we are ready to face the challenges posed by heightened competition. We are confident of emerging winners through our superior offerings by way of robust network, innovative services, far-reaching distribution, world-class partners, motivated employees and a strong balance sheet.’

India, Bharti Airtel