UPDATE 1-Bharti Airtel profit surges on India mobile market recovery

Tue Apr 29, 2014 8:26am EDT

* Net profit 9.62 bln rupees vs 9.73 bln rupees estimate

* Revenue rises 13.5 pct

* Higher call prices in India aid profit rise, Africa loss widens (Adds details of financials)

By Devidutta Tripathy

NEW DELHI, April 29 (Reuters) - Bharti Airtel Ltd, India's top mobile phone carrier, reported a surge in quarterly profit, in line with expectations, as reduced competition in the world's second-biggest mobile phone market helped push call prices higher.

Consolidated net profit surged 89 percent to 9.62 billion rupees ($158.9 million) for its fiscal fourth quarter to end-March, New Delhi-based Bharti Airtel said on Tuesday.

The figure compared with analysts' consensus estimate of 9.73 billion rupees.

Prospects for Indian telecommunications companies, which had been hurt by fierce competition and a vicious price war, started improving last year following a court order that revoked the permits of several carriers.

After reporting declining quarterly profit for four years, Bharti Airtel posted a profit rise for the December quarter, helped by higher call prices and a surge in mobile data sales.

Voice services still account for close to 85 percent of Indian mobile revenues, but high-margin data services are growing much faster.

Bharti and its two closest rivals, Vodafone Group Plc's local unit and Idea Cellular Ltd, have become stronger in the past year and now account for about 70 percent of the sector's overall revenue.

The three carriers spent a total of $8 billion in an airwave auction this year to buy the majority of the spectrum on offer, fend off competition and expand their mobile data businesses.

The entry of cash-rich conglomerate Reliance Industries into the telecoms market is now the biggest risk for the three top companies.

Bharti Airtel's African business has been a drag on the company, which has to yet to turn a profit there four years after spending $9 billion to acquire money-losing mobile phone assets.

Losses in its international business, which includes the African operation, more than doubled to 12.18 billion rupees before exceptional items.

Bharti Airtel operates in 20 countries across Asia and Africa and is the world's fourth-biggest cellular carrier by customers.

Bharti said performance in Africa was hurt by a "seasonal downturn" in parts of the continent and regulatory intervention in Nigeria, its biggest African market.

Total revenue for Bharti Airtel, headed by Indian billionaire Sunil Mittal and nearly a third-owned by Singapore Telecommunications Ltd, rose 13.5 percent from the year-earlier quarter to 222.19 billion rupees, lagging estimates of 224.45 billion rupees.

Monthly average revenue per user (ARPU) from its Indian operations, a key metric for phone carriers, rose 1 percent to 196 rupees for the quarter compared with the previous quarter. In Africa, ARPU fell 5 percent from the previous quarter to $5.50.

The results were unveiled after the close of the Mumbai market. Bharti Airtel shares had fallen 0.8 percent on Tuesday, in line with the benchmark index. ($1 = 60.5550 Indian Rupees) (Reporting by Devidutta Tripathy; Editing by Matt Driskill)