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Follow UsBy Shailendra Bhatnagar
NEW DELHI - Bharti
Airtel Ltd., India's top mobile firm by users, should post a 40 percent jump
in quarterly consolidated profit on Wednesday, as it expanded its networks and
wooed more customers with lower call costs.
New Delhi-based Bharti's earnings are expected to grow faster in the coming
quarters as it reaches farther into India's vast untapped rural areas, home to
two-thirds of a 1 billion-plus population.
India's mobile user base has crossed 102 million customers, more than the
combined population of Germany and Belgium. Yet mobile penetration is below 11
percent, suggesting potential for the boom to continue.
Falling handset costs and attractive pre-paid packages are fuelling telecoms
growth in India, which has the world's lowest local mobile call rates of less
than 2 U.S. cents a minute.
But analysts say Bharti's average revenue per user (ARPU) is dropping because
of intense competition in the world's fastest growing wireless market, which is
adding more than 4 million new users each month.
Bharti's consolidated profit is expected at a median 7.15 billion rupees for
the fiscal first quarter to end-June, up from 5.1 billion rupees a year ago, a
Reuters survey of nine analysts showed. Profit was 6.82 billion rupees in
January-March.
"The growth in profit is due to healthy additions in its subscriber
base," said Jaspreet Singh, analyst at broker Prabhudas Lilladher. "Bharti
has grown its GSM market share to 29.4 percent in June," he said, from 28.3
percent in March.
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Bharti, India's most valuable telecoms firm at $14.8 billion, said earlier
this month its mobile base grew 88.2 percent from a year ago to 23.07 million.
Its total number of customers, including fixed-line users, grew 86.4 percent to
24.58 million.
Bharti, 30.8 percent-owned by Singapore
Telecommunications Ltd., added 3.49 million new GSM users in April-June,
compared with 1.27 million in the same period last year.
"Lowering of entry barriers through life-time pre-paids and reduced
handset prices are driving this growth," Singh said.
Bharti's GSM network spans the entire country and it has attracted more than
1 million new users each month in the past quarter, gaining from rivals such as
state-run Bharat
Sanchar Nigam Ltd. (BSNL) which faces a capacity crunch, analysts say.
Bharti Chairman Sunil Mittal expects to spend up to $2 billion on expanding
networks across all 5,200 towns and hundreds of thousands of villages this year.
Billionaire Mittal, a first generation entrepreneur, also has interests in
insurance and commercial agriculture. Britain's Vodafone Group Plc. has a
near-10 percent stake in Bharti, bought for $1.5 billion last October.
Apart from unlisted BSNL, Bharti competes mainly with Reliance
Communications Ltd., Hutchison
Essar Ltd. and Idea
Cellular Ltd.
Bharti shares, which have a 3.8 percent weighting in the main 30-share index,
fell 10.4 percent in the past quarter, under performing an 8.1 percent drop in
the sector sub-index.