Surging network costs and intense competition have continued to impact Bharti Airtel’s profit margin, which is reflected in the operator’s financial results for the quarter ended September 2012. The company’s net profit for the quarter stood at Rs 7.21 billion as compared to Rs 10.27 billion for the corresponding quarter in 2011, a decline of 29.8 per cent. This decline has been attributed to the significant tax outgo incurred by the operator during the quarter under review. As per the company’s financial report for the quarter ended September 2012, the Bharti Group’s net profit calculations took into consideration the dividend distribution tax on the dividend received from Indus Towers Limited.

The company’s revenues increased by 17.39 per cent, from Rs 172.7 billion for the quarter ended September 2011 to Rs 202.73 billion during the corresponding period in 2012. The increase can be partly attributed to a one-time income of Rs 5.86 billion realised on account of a favourable judgment from the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) with respect to an outstanding dispute on interconnection agreements. The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) increased from Rs 58.15 billion during the quarter ended September 2011 to Rs 63.51 billion during the corresponding period in 2012. The EBITDA margin, however, declined from 33.7 per cent for the quarter ended September 2011 to 31.3 per cent during the quarter under review.

The revenues from the company’s Indian and South Asian operations accounted for over 70 per cent of its total revenues. These increased from Rs 126.79 billion during the quarter ended September 2011 to Rs 144.19 billion in the reported quarter. Its net income from this region, however, declined from Rs 14.52 billion to Rs 12.60 billion during the same period. Further, the operating margins for the Indian operations declined from 36.1 per cent to 32.7 per cent. As on September 30, 2012, Bharti Airtel had a net debt of Rs 667.6 billion.

The share of non-voice revenues in the operator’s total revenues increased from 16.1 per cent during the quarter ended September 2011 to 16.3 per cent during the corresponding period in 2012. The data services segment had a subscriber base of 40.6 million for the reported quarter, of which around 10 per cent availed of the operator’s 3G services. The share of the data segment in the total revenue grew from 3.1 per cent during the quarter ended September 2011 to 5.2 per cent during the reported quarter.

The operator’s minutes of usage (MoUs) increased from 217.41 billion to 234.22 billion during the period under review while its ARPU declined from Rs 183 to Rs 177. The revenue per minute also declined from Re 0.432 to Re 0.426 per subscriber. The monthly subscriber churn increased from 7.2 per cent to 8.5 per cent.

Meanwhile, the company’s African business was on track with an increase in its subscriber base and a decline in its opex. In 2010, the Bharti Group had acquired Zain’s telecom operations in 15 African countries for $9 billion. While the business is yet to turn profitable, it is doing well on the operational front. The revenues from the company’s African operations increased from Rs 47.03 billion to Rs 60.51 billion during the period under consideration. However, losses for the African operations widened, from Rs 4.27 billion during the quarter ended September 2011 to Rs 5.39 billion for the corresponding quarter in 2012. The operating margins for the region improved from 26.4 per cent to 27.1 per cent during this period. The MoUs increased from 17.95 billion to 23.65 billion while the monthly subscriber churn fell from 6.1 per cent to 5.1 per cent.

Going forward, the operator is betting big on its 4G services in India. It has already launched these services in three cities and is currently the only operator in the country to offer these services.