Airtel Q2 profit falls 29 pc on rising costs

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The profit in the second quarter was 5 per cent lower than Rs 762.2 crore earning in April-June period of current fiscal.

New Delhi: Bharti Airtel, India's largest telecom operator, on Wednesday reported its 11th consecutive quarter of net profit dip as rising costs and competition squeezed margins, forcing the company to look at increase in tariff. Net profit in July-September dropped 29.7 per cent to Rs 721.2 crore from Rs 1,027 crore in the year ago period. The profit in the second quarter was 5 per cent lower than Rs 762.2 crore earning in April-June period of current fiscal.

"We have lost about 40 per cent pricing power in the last 12 quarters. Given the inflation that has hit this country over the last 12 quarters, least we deserve is to go back to the levels we were at," Bharti Airtel CEO for India and South Asia Sanjay Kapoor told reporters. The company said network cost had increased so as competition, putting pressure on margins.

"Otherwise we are never going to sort of money that everybody expects us to make and replough that back in to business," he added. On overall performance of the company during the July-September 2012 quarter, Kapoor said, "Despite the seasonally most weak quarter, I think this performance is satisfactory."

Total income of the company during the reported quarter was up by 17.4 per cent at Rs 20,283.2 crore compared to Rs 17,276.4 crore for the corresponding period in previous financial year. The average revenue the company earns from a user stood at Rs 177 per month in the reported quarter, compared to Rs 183 in the same period last year and Rs 185 in the April-June 2012 quarter.

As on September 30, 2012, overall customer base of the Bharti Airtel stood at 262.6 million, across 20 countries. This includes 251.8 million wireless customers which took Airtel amongst the top four global operators in terms of subscribers base. Bharti Airtel's customer base in India stood at 196.65 million at the end of reported quarter.

At the end of second quarter of FY'13, the company has 5.4 million active 3G customers of which 4 million are active 3G data customers. Bharti Airtel made cumulative investments of Rs 1,87,719.7 crore on global level till the end of July-September 2012 quarter. The company invested Rs 74,745.9 crore in its mobile services business in India and South Asia region.