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Bharti Airtel Blames Nigerian Losses As Q1 Profit Drops 31%

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Bharti Airtel Blames Nigerian Losses As Q1 Profit Drops 31%

Bharti Airtel is India's largest telecom network operator.


New Delhi: Bharti Airtel Ltd, India's largest telecom network operator, reported a 30.8 per cent fall in first quarter net profit on Wednesday, blaming an adverse foreign exchange impact in Nigeria, although it beat analysts' estimates.

Consolidated net profit fell to Rs 1,462 crore ($218 million) in the quarter ended June 30, from Rs 2,113 crore last year, the company said.

Analysts on average had expected a net profit of Rs 1,159 crore, according to Thomson Reuters data.

Bharti Airtel, headed by billionaire Sunil Mittal, said total revenue rose 7.9 per cent from a year earlier to a record Rs 25,547 crore, helped by new customers signing up for the company's 3G and 4G data services.

During the quarter, the Nigerian naira depreciated by 42 per cent, forcing the company to register an exceptional loss of Rs 748 crore as a result. Bharti derives about 7 per cent of its consolidated EBITDA (earnings before interest, tax, depreciation and amortisation) from Nigeria, analysts estimate.

Restructuring in some other countries also hurt profits, the company said.

Mobile data revenue during the June quarter rose 35 per cent to Rs 3,525 crore from a year ago, Bharti Airtel said. Average revenue per user (ARPU) of data rose 10-fold from a year earlier to Rs 202 during the quarter.

The proliferation of cheap smartphones, led by Chinese brands, has prompted more Indians to use their handsets to access the Internet and demand faster downloads. An internet-based start-up boom in the country has also seen increased adaptability on smartphones, bolstering demand for high-speed data.

Over 100 million smartphones were sold in India, the world's second biggest mobile phone market by customers, last year and that number is expected to grow by over a quarter this year.

Earlier in July Indian conglomerate Reliance Industries said it would launch its much-awaited fourth generation (4G) wireless services commercially in the coming months, competing with Bharti Airtel, which ramped up coverage of its 4G services last year to 300 towns in anticipation.

4G services should make it much faster than 3G services to surf the web on mobile phones, tablets and laptops.
© Thomson Reuters 2016


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