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Bharti Airtel grows as Indian mobile market booms

John Ribeiro | Oct. 31, 2008
Bharti Airtel, India's largest telecommunications company, posts strong revenue growth, despite concerns about flagging consumer spending.

BANGALORE, 31 OCTOBER 2008 - Indian operator Bharti Airtel reported strong revenue growth for the quarter ended September 30, boosted by 8.2 million new subscribers during the period.

The company, which offers both mobile and fixed-line services, posted revenue of Indian rupees 90.2 billion (US$1.9 billion on the last day of the quarter), up by 42 percent from the same quarter last year.

Falling average revenue per user (ARPU) and investments required to expand the company's networks cut into Bharti Airtel's profits, which rose 27 percent to rupees 20.5 billion.

Bharti Airtel had 80 million subscribers at the end of the quarter, up by 57 percent from the same quarter last year. About 77.5 million of these subscribers are mobile phone subscribers.

There has been concern that consumer spending in India may have been affected by a slowdown in the country's stock markets, and the impact of a global economic crisis on the country's outsourcing industry and other export industries.

Figures released earlier this month by the Telecom Regulatory Authority of India (TRAI) suggest that the mobile services market has not been affected yet, and continues to grow. India added 10.07 million mobile subscribers in September, taking the total number of mobile subscribers to 315.3 million.

The Indian market is getting very competitive with urban markets getting saturated and aggressive pricing by service providers driving down ARPU. Looking ahead, ARPU is expected to drop further as large mobile companies like Bharti Airtel address opportunities in India's rural markets.

A number of foreign players including Vodafone Group have invested in the growing Indian mobile services market. Telenor said this week that it is set to acquire a 60 percent stake and operational control of a local start-up, Unitech Wireless, which holds mobile services licenses and spectrum in 13 services circles in the country.

 

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