Bharti Airtel, formerly called Bharti Tele Ventures Limited, has announced its financial results for 2005-06. The company maintained a strong growth momentum during the year. While net profits registered a 51 per cent increase at Rs 22.58 billion, revenues rose by 46 per cent to Rs 116.63 billion.

Mobile services contributed 71 per cent of Bharti's total revenues while fixed line operations accounted for 13 per cent.The long distance sector and enterprise services contributed 21 per cent and 6 per cent respectively. As of March 31, 2006, Bharti's total assets stood at Rs 217.2 billion. Its capital expenditure during the year was Rs 63.3 billion, of which Rs 41.5 billion was on mobile services and the rest on its other businesses. Bharti continues to be a debt-averse company with a debtequity ratio of about 0.45.

The main driving factor behind its strong performance was, once again, the addition of an impressive 9 million users (a 71 per cent increase), taking the company's total subscriber base to 20.9 million at the end of financial year 2005-06.

Of its total subscriber base, 19.5 million are mobile customers and 1.3 million are broadband and fixed line customers.Bharti currently provides cellular services in all the 23 circles in the country and telephone services and internet access over DSL in 15 circles. The mobile subscriber base witnessed 78 per cent growth while the broadband and fixed line services combined saw a 57 per cent increase during 2005-06.

The growth in subscriber base also resulted in a marginal increase in Bharti's cellular market share to 21.8 per cent compared to 21.2 per cent earlier.However, its share of net additions stood at 22.9 per cent in March 2006, against 27.8 per cent in March 2005.

The average revenue per user (ARPU) for both mobile and fixed services was also down, mainly on account of the increasing competition in the sector and falling tariffs. While the mobile ARPU fell by 12 per cent from Rs 505 at the end of March 2005 to Rs 470 at the end of March 2006, the ARPU for the fixed line segment dropped 14 per cent from Rs 1,229 to Rs 1,063 during the same period.

On a quarterly basis, the sequential revenue growth was 12.7 per cent during the quarter ended March 31, 2006 at Rs 34.1 billion over the corresponding period of the previous year, though revenues from the mobile segment grew at just 11 per cent. This is despite a much higher subscriber growth of 20 per cent quarter on quarter, signalling the impact of falling tariffs in an intensely competitive environment. About 98 per cent of the net additions in the fourth quarter of 2005-06 came from prepaid customers. An increasing number of customers opted for the lifetime prepaid scheme, realisations from which are initially low.

Commenting on the results, the company's chairman and managing director, Sunil Bharti Mittal, said: "Bharti has delivered a strong performance, which reflects the success story of the Indian telecom sector. It was a strong growth year for us."

On the future plans of the company, Mittal said: "The outlook for the year remains positive and the year ahead promises to be an exciting one for Bharti." The company is looking to expand its mobile operations to 5,200 towns in the country from the current 3,800 before the end of financial year 2006-07. It plans to double its cell sites to 40,000 in the ongoing year and has allocated $2 million. A large part of this money would come from the company's internal accruals (mainly cash profits) and the shortfall would be made up through borrowings.

Bharti also plans to roll out 3G services soon, based on the government releasing spectrum for the purpose. With strong financials to support its ambitious plans, the company seems well-placed for its march forward.