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Indian Carriers Grow Quarterly Profits

Light Reading
News Analysis
Light Reading
4/27/2007
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Three of India's top carriers reported their quarterly figures this week, and with mobile subscriber numbers continuing to grow at a record pace, profit growth was solidly in double-digit territory. (See Top 10 Emerging Mobile Markets .)

Bharti Airtel
Bharti Airtel Ltd. (Mumbai: BHARTIARTL), the country's largest operator, on Friday reported a 58 percent year-on-year increase in revenues to 53.93 billion Indian rupees (US$1.32 billion) during its fiscal fourth quarter, thanks to an 86 percent increase in subscribers to 39 million. (See Bharti Airtel Reports Q4.) The carrier almost doubled its net income, which increased by 98 percent to INR13.53 billion ($332 million).

Those figures were ahead of analysts' projections of a INR12.39 billion ($304 million) profit on revenues of INR55.07 billion ($75.1 million).

Bharti increased its market share from 20.4 percent at the end of March last year to 22.9 percent, and the company plans to invest $3.5 billion this year to maintain its market leadership. The carrier also says it will roll out IPTV service later this year, which it's trialing in 100 households in Gurgaon.

MTNL
State-run Mahanagar Telephone Nigam Ltd. (MTNL) , which reported its financials Tuesday, has already launched its triple-play service, Triband, but it's yet to take off with consumers. MTNL offers fixed-line and mobile services in the Mumbai and New Delhi regions (the rest of the country is covered by its counterpart, BSNL) and has tended to suffer in comparison to its national mobile rivals.

MTNL's revenues fell from INR14.45 billion ($354 million) in the third quarter of last year to INR11.99 billion ($294 million), but its mobile revenues increased by 5.49 percent to INR1.65 billion ($40 million). (See MTNL Reports Q4.) The operator now has 2.75 million mobile customers, up from around 1.9 million last year, and recently awarded Alcatel-Lucent (NYSE: ALU) a contract to install an additional 2 million lines. (See Alcatel-Lucent Wins in India.)

MTNL has been able to cut costs to offset the revenue decline, reporting a 47 percent increase in net income to INR2.06 billion ($50.5 million).

IDEA Cellular
Idea Cellular Ltd. , which is in the process of expanding from a regional to a national player, yesterday reported fourth-quarter revenues of INR13.41 billion ($329 million), a 54.9 percent increase over the same quarter last year. (See IDEA Cellular Reports Q4.) Net income also climbed during the quarter to INR1.93 billion ($47.3 million) -- 65.6 percent higher.

During the third quarter of the fiscal year, IDEA launched service in three new regions of the country. IDEA reported a 90.2 percent increase in subscribers to 14.01 million by the end of the fourth quarter, pushing its market share up from 7.65 percent to 8.63 percent.

Earnings announcements are still to come from Bharat Sanchar Nigam Ltd. (BSNL) , Reliance Communications Ltd. (RCom) , and Hutchison Essar .

— Nicole Willing, Reporter, Light Reading

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