Airtel set to report profit fall on Africa drag

FEBRUARY: Bharti Airtel, India's top mobile phone carrier, is expected to post a 26 per cent fall in quarterly profit as weaker margins from its African operations and big spending on new technologies weigh.

The outlook for India's mobile market -- the world's second biggest and the fastest growing by wireless customers -- has improved after prices steadied last year following a price war that sent call prices tumbling in late 2009.

But Africa remains a worry for Bharti where it acquired the loss-making telecoms operations of Zain in 15 countries in a $9 billion deal in June to become the world's fifth-biggest wireless carrier.

Bharti competes in India with 14 other companies including Reliance Communications and Vodafone .

A Reuters poll of 12 brokerages had on average expected a third-quarter net profit of 16.25 billion rupees ($357.9 million) on revenue of 155.40 billion rupees for the New Delhi-based firm that operates in 19 countries across Asia and Africa. Last year, the company reported a net profit of 22.1 billion rupees on revenues of 97.7 billion rupees.

Bharti aims to launch third-generation (3G) wireless services across all its 13 telecoms zones in India by March and expects the premium offering to help stabilise its average revenue per user (ARPU).

The company, which spent $2.7 billion last year to buy 3G radio airwaves in an auction, recently launched the services in southern Karnataka state, whose capital is the technology hub of Bangalore.

Bharti, 32.2-percent owned by Southeast Asia's top telecoms firm SingTel , hopes to cover 40 cities by March and expand the services to 1,500 cities and towns by a year later.

Third-generation services facilitate faster Internet on mobile phones and let customers use services such as video calls.

The services are expected to boost mobile carriers' data revenue in a market where low-margin voice calls account for close to 90 percent of the total revenue.

Bharti's monthly ARPU in India in the September quarter fell 20 percent from a year earlier to 202 rupees.