Price competition hits Bharti, SingTel profits

Michael Carroll & Robert Clark
12 Aug 2010
Daily News

Bharti Airtel continues to feel the strain from India’s hectic price competition, posting a 32% fall in earnings for the second quarter.

Revenue for the Indian market leader grew 17% to $2.6 billion, and while average minutes of use grew sequentially from 468 minutes to 480 minutes, ARPU fell from 220 rupees to 215 rupees.

It posted net income of $361 million, blaming the decline on tough domestic competition and 3G license acquisition costs.

It also lost $46 million on forex thanks to the strengthening US dollar, compared with a $60 million gain a year ago.

Consolidated ebitda was up 5% year-on-year at $968 million.

Revenue from the territories grew 8.2% to $2.4 billion during the quarter, as subscriber numbers increased 7% to 140.6 million.

“Our business in India and South Asia got off to a solid start with robust revenue growth and healthy margins,” said chairman and CEO Sunil Bharti Mittal. “This reaffirms our conviction that leaders emerge stronger in a hyper competitive market.”

Karvy Stock Broking analyst Harit Shah said Bharti’s performance in India was “heartening,” and tipped the firm to improve ARPU in fiscal 2Q as the price war in the country dies down, reported.

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