The Hindu Business Line : Strong subscriber base drives Airtel Q1 profits up

New Delhi, July 24 A massive increase in its subscriber base has enabled telecom major Bharti Airtel Ltd to record a 34 per cent rise in profit for the quarter ended June 30, 2008. Bharti’s subscriber base increased by 61 per cent compared to the corresponding quarter last year to touch 7.17 crore.

During the quarter, Airtel added 75.09 lakh new customers, which is the highest ever addition in a single quarter. The company maintained its leadership position through an improved market share of all India wireless subscribers at 24.2 per cent, up from 23.1 per cent corresponding to the same period of last year.

Net profit included a foreign exchange loss of Rs 148 crore due to a weak rupee.

Strong uptake

Commenting on the results, Mr Sunil Bharti Mittal, Chairman & Managing Director, Bharti Airtel Ltd, said, “It has been another quarter of leadership consolidation for the company. On the mobile side, it has been a particularly strong quarter with monthly customer adds crossing the 2.5 million mark. This clearly demonstrates that the Indian telecom growth story is intact and the rural markets are witnessing strong uptake. With our network, distribution and brand strength we are confident of continuing to lead this growth story.”

The average revenue per user (ARPU) for Bharti’s mobile services slipped to Rs 350 in the quarter ended June 30 from Rs 357 in the January-March quarter. ARPU was Rs 390 a year earlier.

However, this was balanced out by an increase in the average minutes of usage which increased to 534 in the first quarter from 507 in the fourth quarter. Minutes of usage was 478 a year earlier. The company has received additional spectrum in 8 circles and is expecting to get more radio frequency in 7 more areas, which will help Airtel add more subscribers at a faster pace.

MTN talks

On the issue of reviving talks with South African telecom company MTN, the company said that it was a possibility though there was nothing in that direction yet. “It is for MTN to decide. There were always synergies between both the companies to have an alliance. That is why we went up to a certain stage of our discussion with them.

“Nothing has happened as yet. It is speculation at this stage to say if anything can move ahead from here between Bharti Airtel and MTN. Let’s wait,” Bharti Airtel’s Joint Managing Director and Group CFO, Mr Akhil Gupta, said, when asked whether any feelers have been exchanged with MTN on resuming the talks. He, however, clarified that the company’s stand on the structure of the merger has not changed.

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