Bharti Airtel Q3 net profit sinks 72% at Rs 284 cr

Feb 08 2013, 10:12 IST
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Profit at Bharti Airtel Ltd, India's top mobile network operator, fell for the twelfth quarter in a row. (Reuters) Profit at Bharti Airtel Ltd, India's top mobile network operator, fell for the twelfth quarter in a row. (Reuters)
SummaryBharti Airtel's reported decline in its consolidated net profit for 12th consecutive quarter.

Bharti Airtel, India's largest private mobile operator, today reported a 72 per cent slump in its third quarter (Q3) net profit as a weak rupee increased interest and network equipment costs.

This is the 12th consecutive quarter for Bharti Airtel when profit has dropped. Net profit in October-December slumped to Rs 284 crore from Rs 1,011 crore a year ago.

The total revenues of billionaire Sunil Mittal-owned company, however, rose 9.5 per cent to Rs 20,239 crore for the quarter from Rs 18,477 crore in the year-ago period.

"Market conditions have been challenging in recent quarters due to pricing pressures and rising input costs, which have put enormous pressure on the sector and consequently the margins," Bharti Airtel Chairman and Managing Director Sunil Bharti Mittal said.

Led by decline in margins and increasing costs, the company recently increased rates of special tariff vouchers and reduced free minutes usage for customers.

"What we have said in the past is that this industry is laid with a huge amount of unnecessary leakages that happened between the headline tariffs and realised tariffs and I think it is upon us now to start correcting those leakages and those excessive discounts because they are unhealthy and untenable," Bharti Airtel CEO (India and South Asia) Sanjay Kapoor told reporters here.

He added the endeavour is to reduce the gap between realised tariff and headline tariff.

Kapoor said the quality of customers has actually gone up post the revision.

"Yes, the quality of customers has gone up and that gets specified by two indices, one is the churn ratio coming down at a very fast pace and the VLR is going up," he said.

"The worst seems to be getting over with corrections taking place in customer acquisition practices and the tariffs, which are driving quality of acquisitions and improving efficiencies," Mittal said.

The company's overall customer base stood at 262.27 million across mobile telephony, telemedia and digital services across geographies.

Monthly average revenue per user (ARPU), a key metric for telecom carriers, from Bharti's Indian operations declined to 185 during the reporting quarter from 187 in the same period last year.

The net debt of the company stood at Rs 64,282.5 crore as on December 31, 2012.

The company also has to pay Rs 5,201 crore as one-time fee to government for spectrum it holds above 4.4 MHz.

Airtel added 6.6 billion minutes on network during the quarter.

"Despite a negative net additions, the data has done exceedingly well, 0.9 million

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