India's Bharti quarterly profit dives surprise 28%

India's top mobile phone firm, Bharti Airtel, reported Wednesday a far bigger than expected 28 percent dive in quarterly net profit from a year ago, as it was hit by heavy debt charges. Net profit slid to 10.06 billion rupees ($191 million) in the three months to March from a year earlier, Bharti said, undershooting market expectations that profit would fall by around 11 percent to 12.5 billion rupees.

The fall marked Bharti's ninth straight quarterly profit drop in India's competitive mobile market. Revenues climbed 15 percent to 187.29 billion rupees after Bharti recently raised call rates for the first time in at least two years. Interest charges from Bharti's $10.7-billion debt-funded purchase in 2010 of the African mobile operations of Kuwait's Zain and its $3.2-billion acquisition of 3G spectrum to offer faster telecom services weighed on earnings. Foreign exchange losses and tax provisions also hit the company's performance. The purchase of Zain's operations made Bharti the fifth-largest mobile operator globally.

The results came amid turmoil in India's telecom market after the Supreme Court this year cancelled 122 second-generation (2G) mobile licenses issued in 2008 on grounds the distribution process was under-priced and corrupt. The move has created uncertainty about the future of the mobile market, which had been seen as one of India's biggest economic liberalization success stories.

"The recent regulatory developments in India will have significant implications on the future of telephony and broadband as well as India's global competitiveness," said Bharti's billionaire chief Sunil Bharti Mittal.

Via AFP