Airtel net profit up 8 percent, but user revenue falls (Second Lead)

New Delhi, April 29 (Inditop) Telecom major Bharti Airtel Wednesday reported 8 percent rise in net profit in the quarter ended March 31, 2009 even as its average revenue per user (ARPU) slipped during the period.

The company’s net profit in the January-March quarter stood at Rs.2,048 crore, up from Rs.1,899 crore in the corresponding period in 2008.

Total income too increased about 30 percent to Rs.10,296 crore from Rs.7,929 crore, the company said.

The group’s net profit increased about 23 percent to Rs.7,859 crore in 2008-09, compared to Rs.6,390 crore the previous fiscal, while total income surged over 37 percent to Rs.37,504 crore from Rs.27,290 crore.

However, the company’s ARPU dipped 15 percent to Rs.305 during the last quarter as against Rs.357 a year ago.

“Dipping ARPU is a result of the promotional free minutes offered by the company,” Airtel deputy chief executive Sanjay Kapoor said.

The minutes of usage per subscriber also dropped from 505 minutes to 485 minutes in the quarter, a decline of 4.3 percent.

HOwever, the company said its direct-to-home (DTH) business, which was launched last October, was making profits.

“We add about 5,500 customers everyday. We will soon expand to 1,000 cities from the current 304,” Atul Bindal, president mobile services, said.

Bharti Airtel has earmarked $2 billion for capital expenditure, which, however, excludes the third generation (3G) and tower businesses. It has set aside $1 billion for the tower business that includes wholly-owned Bharti Infratel and Indus Towers, in which it has 42 percent stake.

The company said it had 96.6 million subscribers as of March 31, an increase in the total subscriber base of 50 percent or about 32.4 million subscribers from that on the same date last year.

The company also announced a stock split, dividing existing equity shares of Rs.10 face value into two equity shares of Rs.5.