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Bharti Airtel exec says era of falling mobile tariffs has ended

05 декабря 2011

Bharti Airtel Ltd., India's largest mobile phone operator by subscribers, expects a recent tariff hike to help revenue in the coming quarters and believes the era of falling charges has ended, a senior company executive said Friday.

"The declining pricing regime probably came to an arrest first and is now probably reversing the curve a little bit. The impact of this will be realized over the next couple of quarters," Sanjay Kapoor, the operator's chief executive for India and South Asia, told Dow Jones Newswires in an interview in Singapore.

Indian telephone users have long enjoyed shrinking bills because of cut-throat competition that eroded operators' profitability. In some parts of the country, more than a dozen service providers compete, offering connections for less than one cent a minute as they seek to attract customers.

For most players "even the revised price doesn't cover their variable costs. That's clearly indicative to say that industry will take a practical view on their pricing at various points in their lifecycle," Kapoor said."Boards and investors of companies now have lesser tolerance for non-performance and indiscriminate burn of cash."

Earlier this month Bharti announced a disappointing 38% drop in second-quarter net profit as a weaker rupee and a surge in interest expenses drove up costs and its customers made fewer telephone calls. Net profit in the July-September quarter fell to INR10.27 billion ($225 million) from INR16.61 billion a year earlier.

Bharti increased call charges in India by up to 20% in July, but that is yet to translate into higher average revenue per user, a key performance indicator for telecom companies. Its ARPU in India fell 4% sequentially to INR183 in the second quarter, while average usage slipped 5% to 423 minutes.

Kapoor said the company, which is about 32% owned by Singapore Telecommunications Ltd., plans to launch fourth-generation mobile telephony services before the end of its current fiscal year in March 2012 and expects data usage to rise in coming years.

"We are definitely moving toward a data explosion. The data story in India, given the mix of our demography, can go nowhere but north," he said, pointing to the rapidly growing youth with rising incomes.

The company is also open to acquisitions for growth although it has no proposals currently under consideration, Kapoor said.

"What one hears and reads in newspapers clearly spells out that the government wants to favor a liberal M&A policy. That will enable consolidation, which is absolutely the need of the hour," he said, adding that "once the (government) policy is formulated, we will make our choices and decisions based on the reality that prevails at that time."

Источник: Total Telecom

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