Bharti Airtel says have put an end to declining RPMs

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Bharti Airtel says have put an end to declining RPMs

The markets have been challenging, both locally and globally as well acknowledged the nation’s top telecom service provider Bharti Airtel.

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The markets have been challenging, both locally and globally as well acknowledged the nation's top telecom service provider Bharti Airtel .

Sunil Mittal-led telecom major announced a 38% fall second quarter profit, its seventh straight quarterly profit drop, hit by higher interest costs and foreign exchange losses. 

Shares of the company crashed soon after the results were announced but managed to claw back and rise nearly a 1% higher on statements made by the management. 

Speaking to the press, the management clarified that the second quarter witnessed a heightened impact of seasonality. The company said that the bulk of customers haven't yet shifted to the new tariff scheme.

The important number to note was the falling average revenue per user (ARPU), down to Rs 183 from earlier Rs 206. It indicates that the company is not making too much money per user.

The company, meanwhile, has assured that it has arrested the fall for now.

Currency fluctuations led to foreign exchange losses of Rs 239 crore for the quarter versus profit of Rs 249 crore in the year ago quarter.

Bharti also took on debt to pay more than USD 3 billion for 3G and broadband spectrum in a state auction last year. "We have 80% of the debt, which has no currency risk," a company official said adding, "...collectively the industry has paid Rs 1,000 crore to the government as penalty."

The world's fifth-biggest mobile phone carrier by subscribers last year ventured into Africa by acquiring most of the African mobile operations of Kuwait's Zain in a USD 9 billion debt-funded deal.

High costs in Africa have kept margins under pressure. The region has not yet generated any profit so far. Bharti said tariffs in Africa are stable for the moment. 

Bharti said the African revenue is up 7% in local currency terms. It is confident that Africa will be its major growth driver in times to come.

We are growing quarter-by-quarter in Africa if forex losses ignored, the spokesperson said adding, "We remain focused on USD 5 billion revenue target by 2013 for Africa."

The company has added 1,000 network sites in the second quarter. It also said that it is not averse to any sort of inorganic growth opportunity going forward.

Meanwhile, Bharti announced that it launch wireless broadband services in India in the current fiscal year ending March 2012.

Sagar Salvi
sagar.salvi@network18online.com