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Bharti Airtel Q4 Net Falls More Than Expected on Africa Drag

By Reuters

  • 05 May 2011

Bharti Airtel, India's leading mobile phone carrier, posted a bigger-than-expected 31.5 percent fall in quarterly profit, hit by losses at its African operations.

Bharti's prospects in its main market in India, the world's second-biggest and fastest-growing by mobile customers, have improved after call prices steadied last year following a vicious price war that led to sharp drops.

Companies including Bharti have recently started rolling out third-generation (3G) networks and are eyeing a pickup in premium data services to boost margins after they spent a total $15 billion at auction last year to buy costly radio spectrum.

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But Africa remains a worry for Bharti. It acquired the loss-making mobile operations of Kuwait's Zain in 15 countries last June in a $9 billion deal and became the world's fifth-biggest mobile carrier by subscribers.

Shares in Bharti, valued at about $32 billion, fell as much as 4.7 percent after the earnings to 352.20 rupees in a slightly higher Mumbai market.

Bharti, 32.3-percent owned by Southeast Asia's biggest phone firm SingTel, said consolidated net profit fell to 14 billion rupees ($314 million) for its fiscal fourth quarter ended March, from 20.44 billion reported a year earlier.

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It was the fourth consecutive quarter of falling profits for Bharti, since it started reporting results based on international accounting standards.

Net sales rose to 162.65 billion rupees from 107.49 billion.

A Reuters poll of 10 brokerages had on average expected net profit of 16.32 billion rupees on revenue of 163.28 billion rupees for the New Delhi-based firm that now operates in 19 countries across Asia and Africa.

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Bharti accounts for a fifth of India's mobile market of more than 800 million customers. It operates second-generation mobile services in all 22 telecoms zones in the country and has rights to offer 3G services in 13 of them.

India's mobile market has been hit by a multi-billion dollar telecoms licensing scandal that has rocked the government and businesses. Bharti has not been implicated in the scandal.

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