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Bharti still in red, Q4 gives some solace

New Delhi, April 23: Bharti Tele-Ventures Limited reported a loss of Rs 178 crore during the financial year ended March 31 this year, which was 45.9 per cent higher than the previous year’s loss of Rs 122 crore.

However, revenues at the Bharti group’s holding company for telecom operations surged 107 per cent to Rs 3,083 crore from Rs 1,486 crore in the year-ago period.

Cash profits from operations rose 58 per cent to Rs 489 crore from Rs 309 crore.

The company reported excellent fourth-quarter performance earning a net profit of Rs 26 crore against a net loss of Rs 7 crore in the third quarter ended December 31, 2002.

The company attributed the surge in the full year’s loss to the extremely competitive environment over the past 18 months during which it launched 16 projects. It has also doled out freebies and incentives through constant price adjustments to expand its AirTel customer base, which has doubled to 3.1 million customers on March 31.

The customer-grabbing dole-outs included mobile-to-mobile incoming calls free, introduction of schemes that incorporate incoming calls free for new customers, reduction in national long distance rates, and the introduction of discounts on international long distance calls.

“The results reflect the benefit of integrated strategy adopted by Bharti which has enabled us to deliver significant value to our customers. Bharti has had over 100 per cent growth in revenue this year. We had 127 per cent growth in the subscriber base in both mobile and fixed-line operations,” said Rajan Bharti Mittal, joint managing director of Bharti Tele-Ventures.

Bharti, which offers cellular services in 15 of the 22 circles in the country, has seen its bottomline badly crimped because it aggressively sought to expand its market share to 24.2 per cent of the all India mobile customer base from 21 per cent a year ago.

Bharti Televentures had 3.44 million customers comprising 3,071,463 mobile subscribers and 3,71,973 fixed-line customers.

The company reported that the average monthly minutes of use per customer had risen by 8 per cent for its post-paid customers to 575 minutes from 534 minutes a year ago.

But it was in its pre-paid customer base that the company reported a sharp 39 per cent increase in average monthly minutes of use per customer at 125 minutes against 90 minutes a year ago.

The biggest concern in the telecom industry — especially in a competitive environment like India — is the churn factor, which is the percentage of customers who opt for a rival service provider.

In the case of pre-paid customers, the monthly churn was reported at 5.5 per cent, up from 4.1 per cent a year ago.

There was a higher churn among post-paid customers — a voluntary churn of 1.5 per cent against 0.9 per cent earlier; the post-paid company initiated churn was 6.9 per cent against 5.2 per cent a year ago.

The company said the growth in customers in the fourth quarter came solely from the pre-paid segment with 128 per cent of the net additions being pre-paid customers. The high churn among post-paid customers was largely in the new circles.

During the quarter, the company arranged international funding of over Rs 1,550 crore.

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