MUMBAI, India - top India Bharti Airtel mobile operator reported a drop of 31.5% in quarterly earnings Thursday, missing expectations on weak performance in Africa and the rise in costs.
Profit for the January to March quarter was 14.0 billion rupees (314.1 million) on sales of 162.6 billion rupees ($3.6 billion).
Analysts surveyed by FactSet had expected quarterly earnings of 17.1 billion rupees on sales of 162.7 billion rupees.
Bharti has struggled to integrate with profit the assets of Kuwaiti phone Africa mobile operator Zain since he acquired them $ 10.7 billion last June, becoming the telecom operator fifth in the world by subscribers in one of the most important cross-border transactions in the history of the India.
"There are major structural defects in the telecommunications industry in Africa, resulting in very high costs of doing business," said Akhil Gupta, Deputy Director General of the Bharti Group.
Executives said strict standards to know your customer, constraints of the offer to operators of networks in Africa, and disappointing 3 G launches in seven African countries had slowed growth. The competition is also a concern.
Bharti is in the hope of its business model Indian low-cost mirrored throughout Africa, outsourcing of most of the functions to hide the extremely low price.
Gupta, said the company soon plans spin off company Tower of its operations in Africa.
Manoj Kohli, business international leaders Bharti, said 800 employees have been transferred to partners, Ericsson, Nokia, Huawei, and IBM, as Bharti nails its operations of network technology and information in Africa.
"I can see the first signs of ongoing costs down in Africa", Kohli said, adding that the costs of Africa would fall over the next few quarters of four to six.
Angel Broking Srishti Anand telecom analyst said margins for Africa of Bharti enterprises were "very bad".
"We must verify in which has led to steep erosions in the margins of the company of Africa," she said. "We were expecting the company in Africa to become neutral on profit after tax level, but they must have been of steep losses."
Costs of total employee of the more than doubled Bharti, 9.5 billion rupees ($213 million) for the same quarter last year, while sales and marketing expenses rose 7.6 billion rupees to 18.3 billion rupees ($409 million). Amortization of licence and network also posted sharp costs operating expenses rises.
Gupta said that he was looking forward to "steady growth" pillar of the company market Indian.
A brutal war of prices, regulatory challenges, expensive 3 G spectrum auction and a fresh mass spectrum scandal - that Bharti was not involved in - have roiled the sector to rapid growth in the last year.
Profit before tax and interest of the mobile operations of the company in India, Bangladesh and Sri Lanka slid 4.3% to 20.6 billion rupees ($462 million) in the quarter of 21.5 billion rupees during the year - there is the company reducing rates slightly to cling to the part of market. Remuneration of services of business in the region also slipped.
Sanjay Kapoor, CEO of Bharti India and South Asia, operations, said the company is pushing the growth of income of non-voix services and on the Internet.
Mobile phones have stormed the India, but the country today deploys only infrastructure to support mobile data and Internet services.
Kapoor said India - now second telecoms market in the world, still has ample room to grow. Urban mobile penetration in India is 150%, while rural penetration remains low 32.8% and the high penetration rate is only about 1%, he said.
"On" Broadband on the side of things can go only to the North, he said. "".
Bharti said it launched high speed 3 G services in nine of 13 Indian circles and is awaiting regulatory approval to complete the implementation.
Bharti said that he had 212 million mobile customers at March 31, an increase of 131 million a year earlier.
The stock plunged to 4.6% Thursday, before moving 1% in trade from the end of the morning on the Bombay Stock Exchange.
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