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Bharti profit plunges 72%

New Delhi, Feb. 1: Bharti Airtel today posted a 72 per cent fall in net profit for the quarter ended December at Rs 284 crore against Rs 1,011 crore a year ago because of foreign exchange loss and a weak performance by its African unit.

This is the twelfth consecutive quarter of profit slide for the company.

Revenues rose 10 per cent to Rs 20,239 crore from Rs 18,477 crore in the same period a year ago, helped by a 70 per cent growth in its mobile Internet business in India.

The New Delhi-based telecom firm, which is 32 per cent-owned by Singapore Telecommunications, suffered a forex loss of Rs 248 crore as currency fluctuations increased its interest cost on foreign debt. It had posted a Rs 13.2 crore currency gain a year earlier.

“Market conditions have been challenging in recent quarters because of pricing pressures and rising input costs, which have put enormous pressure on the sector and consequently the margins,” chairman and managing director Sunil Bharti Mittal said.

Bharti’s debt at the end of December stood at Rs 64,282.5 crore, which was used to fund its 2010 purchase of the African operations of Kuwait’s Mobile Telecom and to acquire spectrum in the domestic market.

The company also has to pay Rs 5,201 crore as one-time fee to the government for holding spectrum above 4.4 megahertz.

At a time the company’s Indian operations have started showing signs of improvement following the end of an over two-year long price war that dented margins, its African operations have proved to be a major drag on its performance.

During the reporting quarter, Bharti’s loss in Africa doubled from a year earlier to Rs 520 crore and its average revenue per user declined to $6.2 from $6.4 on a sequential basis.

However, in India, average revenue per user grew 4 per cent sequentially to Rs 185, while call traffic rose 3 per cent.

Less competition in the domestic market is helping local telecom firms perform well. Some operators, including Bharti, have recently cut down on discounts on call charges to offset rising costs.

“The worst seems to be getting over with corrections taking place in customer acquisition practices and the tariffs,” Mittal said.

Bharti, which operates in India, Bangladesh, Sri Lanka and 17 African countries, had 262 million subscribers at the end of December.

Shares of the firm today settled at Rs 330.50 on the BSE, down 2.62 per cent from the previous close.

 
 
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