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Bharti dials per-second billing offer

New Delhi, Oct. 30: Bharti Airtel today launched a per-second billing plan, sounding the battle cry at rivals whose aggressive strategies have gnawed at its profit growth in the second quarter.

India’s No. 1 mobile operator will charge users 1 paise per second for all local and national long-distance (STD) calls within its network and 1.20 paise per second for calls to other networks.

Tata DoCoMo, a joint venture of Tata Teleservices and Japan’s NTT DoCoMo, had launched the per-second billing in June. Reliance Communications, Vodafone, Idea, Aircel and BSNL have followed suit.

Unlike Bharti, the others are charging 1 paise per second for local and STD calls to all networks. BSNL charges 2 paise per second for STD calls.

Faced with the tough competition, Bharti’s profit growth hit the slow lane in the second quarter ended September 30.

It reported a 9 per cent growth in revenue at Rs 9,850 crore under US accounting rules for the quarter ended September 30 over the same period last year. Net profit grew 13 per cent to Rs 2,300 crore.

Shares of Bharti fell to a year’s low of Rs 290.30 during intra-day trading before closing at 292.15, down 6.38 per cent, on the BSE.

The growth rates were slower compared with the previous quarter ended June 2009, when revenues were up 17 per cent and net profit grew 24 per cent.

However, the company said it was ready to face the challenges posed by the increased competition and would continue to look at international acquisitions for expanding its business.

“We are ready to face the challenges posed by the heightened competition. We are confident of emerging winners through our superior offerings,” chairman Sunil Bharti Mittal said in a statement.

Existing operators are on an aggressive expansion drive ahead of the service rollouts by new players.

Bharti Airtel deputy group CEO and MD Akhil Gupta said, “We will continue to pursue international expansion in the emerging markets. Africa remains to be an important geography for expansion.”

Bharti’s efforts to merge with South Africa’s MTN Group to create a mobile phone giant in the emerging market with over 200 million subscribers were stymied in September when political pressures forced the two companies to break off negotiations for the second time.

On acquiring a stake in Kuwait-based Zain, Gupta said Bharti was not averse to it. “If there is any opportunity, we will look at it. But at this moment we do not have anything on the horizon,” Gupta said.

Bharti’s move into the less lucrative rural markets is pushing down its average revenue per user and utilisation, said analysts.

ARPU in the September quarter was down 24 per cent from a year ago and by 9 per cent from the previous quarter.

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