Bharti Q4 profit falls 28%

Bharti Q4 profit falls 28%

Dylan Bushell-Embling  |   May 03, 2012
telecomasia.net
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India's Bharti Airtel has reported a 28% slump in Q4 profit as the operator – like many of its local peers – struggled with costs accumulating from the high prices paid for 3G spectrum and licenses.
 
The operator, India's largest by subscribers, posted a net profit for the quarter of 10.06 billion rupees ($189.9 million). The result was down from a 14.01 billion rupee profit a year earlier.
 
The company blamed the decline on 3G license fee amortisation costs of 1.06 billion rupees, interest costs on the license fees of 840 million rupees, as well as forex losses and tax provisions.
 
Bharti Airtel paid 122.95 billion rupees for 3G spectrum in 13 of India's 22 telecom circles - including Delhi and Mumbai – during the mid-2010 auction. It was the largest license fee paid by any of the 3G spectrum bidders.
 
The operator did manage to increase its revenue for the fourth quarter by 15% to 187.2 billion rupees, and grow its subscriber base across 20 countries to 252 million.
 
African revenue grew 15.9% year-on-year, or 28.8% in rupee terms. Bharti Airtel bought into the African market in early 2010 through the $10.7 acquisition of Zain's African assets. Airtel Africa now operates in 17 African nations.
 
For the full year it was a similar story. Bharti Airtel's net profit decreased 29.7% to 42.95 billion rupees, but revenue grew 11.6% groupwide and 18.8% in Africa.
 
In a statement, Bharti Airtel chairman Sunil   Bharti Mittal said he was pleased to see his company cross the 250 million subscriber milestone.
 
But he added that “recent regulatory developments in India will have significant implications on the future of telephony and broadband, as well as India’s global competitiveness.”
 
Mittal was likely referring to recent spectrum management suggestions by Indian telecom regulators, including the hugely unpopular proposal to effectively raise the base price of 2G spectrum thirteen-fold.
Dylan Bushell-Embling
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