* Q2 net profit at 5.12 bln rupees vs 6.90 bln rupees
* Revenue rises 10 percent to 213.24 billion rupees
* EBITDA margin at 32 pct vs 30.6 percent year-ago
* Shares rise as much as 5.5 percent
By Matthias Williams
NEW DELHI, Oct 30 Bharti Airtel Ltd's
better-than-expected operating performance and higher margins
reinforced expectations that India's long-suffering mobile phone
services market is turning the corner even as the market leader
reported its 15th consecutive quarter of declining profit.
Bharti shares were trading up 3.5 percent at 353.70 rupees
in morning trade after rising as much as 5.5 percent in a Mumbai
market that was up 0.2 percent.
The outlook for bigger Indian carriers like Bharti Airtel,
Vodafone Group Plc's local unit and Idea Cellular
has improved this year after a court order invalidated
the licences of several smaller companies, forcing them to
either shut or scale back operations.
The remaining carriers increased call prices earlier this
year, the first such hike in almost three years and they
continue to cut discounts, taking advantage of reduced
competition. Voice calls are the mainstay for Indian phone
carriers, accounting for 85 percent of the sector's revenue.
Bharti's consolidated net profit fell to 5.12 billion rupees
($83 million)for its fiscal second quarter ended Sept. 30 from
7.21 billion rupees a year earlier, said New Delhi-based Bharti
Airtel, the world's No.4 mobile phone carrier by customers.
A weak rupee led to forex losses of 3.42 billion rupees in
the latest quarter, it said. Analysts on average expected a net
profit of 6.90 billion rupees for the company, nearly a third
owned by Southeast Asia's top phone carrier SingTel.
The company reported an EBITDA (earnings before interest,
taxes, depreciation and amortisation) margin of 32 pct, higher
than 30.6 pct in the year-ago quarter.
Bharti and its main rivals do however face a steep increase
in the cost of radio spectrum and hundreds of millions of
dollars in government fees and fines after a upheaval in rules
after a massive telecoms licensing scandal that came to light in
In India, Bharti's monthly average revenue per user, a key
metric for telecommunications companies, fell 4 percent 192
rupees from the previous quarter.
Total voice minutes sold fell 3 percent sequentially in what
is typically seen as a seasonally weak quarter for Indian
carriers as frequent power cuts in rural areas and network
outages during monsoon rains hurt traffic growth.
Separately, Bharti's African business, which it acquired for
$9 billion in 2010, has yet to turn a profit, weighing on its
consolidated earnings. In Africa, monthly average revenue per
user rose 5 percent to $5.7 sequentially.
The company's consolidated net debt was at $9.7 billion at
"Even as we need sustenance of good performance in Africa to
change our view there, the quarter provided ample data points to
support out positive view on the India wireless business," Kotak
Institutional Equities said in a report.
Bharti, which launched high-speed 3G data networks in 2011,
is pushing to increase its revenue share from the premium
services that offer higher margins than bread-and-butter voice
The company has also launched 4G networks in some cities and
this month took full control of a joint-venture 4G broadband
business a year earlier than planned, signalling its intent to
expand the services rapidly.
Idea Cellular Ltd, India's No.3 carrier by
revenue, last week reported quarterly profit surged, but
operating metrics such as average revenue per user and sales of
call minutes fell.
Bharti Airtel operates across 20 countries in Asia and
Africa. India is its main market accounting for about 70 percent
of the total revenue.