Bharti posts $14 million Q1 net loss

By : |July 31, 2002 0



By Shailendra Bhatnagar

NEW DELHI: Bharti Tele-Ventures, a leading Indian telecom services provider,
reported on Wednesday its April-June net loss widened, despite revenue nearly
doubling, because of expenditure on expansion. New Delhi-based Bharti, one of
three integrated telecom service providers in India, offers mobile, fixed-line,
national long-distance and overseas phone services and Internet access.

Bharti, which in February became the first mobile operator to get listed on
domestic markets, said its first-quarter loss rose to 676.2 million rupees ($14
million) from 278.3 million a year earlier. Total revenue rose to 5.39 billion
rupees from 2.76 billion rupees. Analysts said losses in the initial years are
commonplace in the money-guzzling telecom sector as companies spend vast amounts
to set up costly infrastructure and undergo bruising prices wars to win
customers.

"Costs have risen because of the expansion that the company has
undertaken and in improving the quality of its network," said Kalpesh
Parekh, analyst at Sushil Finance Ltd. This was reflected in the interest costs
tripling to 620.7 million rupees, and depreciation and amortization costs
surging 128 percent to 1.24 billion rupees. The company said it had also booked
pre-operative costs of 207.5 million rupees, compared with 60.5 million rupees a
year earlier, but did not provide more details.

Bharti rolled out a clutch of services across the country in the past
quarter, launching fixed-line operations in the southern states of Karnataka and
Tamil Nadu and also began mobile services in three northern and two central
provinces. Bharti now provides mobile services in 14 of the 22 telecom circles.

Cellular Business

Bharti had 1.6 million users at the end of the quarter, up 128 percent from a
year earlier, making it the leading cellular service provider in a country of
over a billion people. Mobile services accounted for approximately 75 percent of
total revenue, a company statement said. India’s $5.0 billion mobile phone
sector, billed as one of the fastest growing markets globally in this decade,
has some 7.4 million users, which are expected to surge at a compounded annual
growth rate of 46 percent in the next five years.

Bharti controls more than a fifth of the total market and competes mainly
with Hutchison Whampoa’s Indian unit and the unlisted Idea Cellular Ltd, owned
jointly by U.S. giant AT&T Wireless, India’s Tata group and the Birla
conglomerate. Bharti’s shares ended up 2.62 percent at 31.30 rupees, while the
benchmark Bombay index inched down 0.11 percent. At the current price, the stock
is still down 30 percent from its initial offer price of 45 rupees. "The
stock is a long term story," Parekh said.
(US$1 = Rs 48.66 )

© Reuters

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