Bharti Airtel quarterly report shows 7.8 % drop in net profit

Bharti Airtel’s net profit, total revenues down on quarter-on-quarter basis

The net profit of Bharti Airtel, the biggest telecom operator in India in terms of market share, dropped by 7.8% in the second quarter of FY 2009-2010 to Rs 2,321 crore from Rs 2,517 crore, on a quarter-on-quarter (QoQ) basis.

During the period, the total revenues declined by 0.97% to Rs 9,845 crore – down from Rs 9,941.6 crore.

Both the revenues and profits of Bharti Airtel in Q2 2009 were below expectations. A poll conducted by CNBC-TV18 had shown that the company’s net profits would be Rs 2,401.2 crore and total revenues would amount to 10,218.4 crore.

Bharti Airtel, based in New Delhi, said in a statement that while its EBIDTA (earning before interest, depreciation, tax and amortisation) margin was 42.1%, the deferred tax writeback stood at Rs 221.2 crore. 

The ARPU (average revenue per user) went down to Rs 252 from Rs 278, and the minutes of usage fell to 450 from 478 quarter-on-quarter.

Sunil Mittal, CMD of Bharti Airtel, however, said in a statement that the company continues to maintain its market leadership position in the mobile segment in spite of the mounting competition. Bharti Airtel’s budding DTH business is emerging to be leader in the field in many states of the country thanks to high the quality of product and service, Mittal added.

Bharti Airtel said that 12 milion-13 million customers were being added each month and that it will pursue “all available growth opportunities” and work towards creating new streams of revenue.

The company said it had 113.4 million customers as on September 30, 2009.

Bharti Airtel had, in September 2009, an ambitious plan to merge with MTN, the leading wireless service provider of South Africa.

It may be noted that NTT DoCoMo, based in Tokyo, and the biggest wireless operator in Japan, is attracting customers with pay-per-second calls. Reliance is now offering plans with call rates of 1 US cent per minute. 

According to data from the Telecom Regulatory Authority of India (TRAI), Vodafone’s share of wireless users in India rose to 17.7% at the end of August 2009 from 17.3% a year before, while Bharti Airtel’s share of wireless users declined to 23.6% from 24.5% in the same period.

Reliance performed well, with its market share rising from 17.8% to 18.4% in 12 months.