Bharti’s profit falls for 10th straight qtr

Q1 Profit Declines 37%, Stock At 2-Yr Low New Delhi: Bharti Airtel, the country's largest telecom company, on Wednesday said its net profit fell 37% to Rs 762 crore during April-June as stiff competition, along with regulatory diktats, higher capital expenditure and licence fee outgo, took a toll.      The company's income during the quarter went up just 3% to Rs 5,849 crore. A higher capex, along with increased depreciation and amortization, meant that the Bharti's profit fell for the tenth straight quarter and pushed the company's stock to a two-year low. With results falling short of analyst expectations, Bharti was the worst-performer on the Bombay Stock Exchange, losing 6.6% to close at Rs 274 on Wednesday.      The company said restrictions on special tariff vouchers and an increase in service tax added to the company's burden with high churn in customers, who generate meager amounts of revenue, and debt for African operations already affecting Bharti's finances. Trai's diktat on vouchers is estimated to have had an impact of Rs 250-300 crore.      "The market continues to be characterized by hyper competition despite the cancellation of 122 wireless licences by the Supreme Court in February 2012. The company is focusing all its attention in developing the data and VAS (value-added service) businesses, even while sustaining growth in overall minutes of usage," Bharti said.      Currently, 2.7% of Bharti's mobile users are using 3G services and non-voice revenue contributed 26.6% of total revenues. The high competition has resulted in high churn, which means that despite high levels of customer additions at the gross level, on a net basis accretion is of the order of 8.8%. The average revenue per user is Rs 185 a month. Bharti had a net debt of $12 billion as of June, primarily due to its $9 billion acquisition in Africa, where operations are yet to turn profitable. Going forward, Bharti said the decision to have spectrum usage charges of 3%-8% against Trai's recommendation of a flat 3% levy "would result in an imbalance skewed against the existing operators". It reiterated its plan for an initial public offer of its tower business but did not provide a timeframe, saying the issue would depend on market conditions.