The definitive agreements to be signed soon,  Bharti will have a bigger playground in an under-penetrated zone as soon as it takes the African plunge.

The deal having come about, analysts believe that the average revenue per user of Zain is quite high and that justifies its current valuation by Bharti. Further, the new combined entity would boost shareholder value in the long term. As if heralding a new profitability scene for the company and its investors, Bharti shares have zoomed 11 per cent since February 15 – that is ever since the two companies had begun parleys for a possible takeover.

With the deal poised to go down in corporate history as the second largest overseas acquisition by an Indian company, after Tata’s take over of Corus for over $13 billion, investors are a cheery lot. The buyout will also see Airtel making a foray into Africa, the fastest growing market. The two businesses combined will be among the top 10 telecom firms in the world with an over 165- million subscriber base and total revenue of $13 million, says a report.

The deal is seen as bringing in a rare consolidation in the highly competitive sector and Bharti would have a major challenge to face in terms of how successful it would be in attempting to integrate its operation with Zain.

Bharti  was able to finalize the deal with the money for funding arranged  from a handful of foreign banks and the State Bank of India. The Standard Chartered Bank is said to have committed the highest amount of $1.3 billion, followed Barclays with $0.9 billion. An amount of $7.5 billion debt would be dollar-denominated and the remaining about USD 1 billion will be in rupee loan from SBI.

The Zain acquisition is Bharti’s successful attempt after it had twice failed to take over another South African giant MTN two years ago.

These growth figures were lower than the net profit of 24 per cent, posted in April-June 2009, in comparison to the same quarter in 2008.

Reports say that four operators, including Etisalat, are poised to enter the already crowded Indian market, in 2009.

Tata DoCoMo, a joint venture of  India’s Tata Teleservices Ltd. and Japan’s largest wireless operator NTT DoCoMo Inc, that was launched in India in June 2009, has already stolen a march over Bharti Airtel by signing up more subscribers in the third quarter.

Tata DoCoMo’s plan to charge per second for calls, unlike other operators who charge per minute, has enabled it to garner more subscribers.

Meanwhile, Vodafone’s market share has grown to 17.7 per cent at the end of August 2009 from 17.3 percent during the same period, in 2008.

During the same period, Airtel’s market share fell from 24.5 per cent to 23.6 percent. Reliance, which also cut down its prices, increased its market share from 17.8 per cent to 18.4 per cent over the past one year.

Akhil Gupta, deputy chief executive officer of parent Bharti Enterprises Pvt., is reported to have said that Bharti Airtel is looking at emerging markets and plans to expand its non-mobile businesses, such as data and direct-to-home broadcasting.

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.