India‘s largest mobile phone operator, Bharti Airtel, saw its profits plunge 22 percent in Q3 2011, the network has confirmed.
Net profit for the three month period ending December dropped to 10.1 billion rupees ($206 million), down from 13.03 billion rupees a year earlier. This profit slump marked the 8th consecutive decline for the company, and is way below analysts’ estimates of a 3.2 percent rise in net profit to 13.45 billion.
The network is blaming the figures on the roll-out of its 3G network which cost more than originally anticipated. However, analysts are claiming the the slump comes due to fierce competition in India’s ever-growing mobile market. It’s also due to the fall of monthly minutes of use per user in India, which dropped - dropped seven percent to 419 minutes in the quarter, and Bharti Airtel’s rise in call rates. This figures could make the company lower these rates, which would in turn make for cheap calls to India.
“I am pleased that investments in branding and networks continue to be our focus in India, as we enhance customer experience for voice quality and cater to the ever increasing demand for data. These investments are resulting in healthy growth of Mobile revenues,” Bharti Airtel Chairman and Managing Director Sunil Bharti Mittal said.
The company predicts that following the roll-out of its 3G network, turn-over will increase thanks to “non voice services”. Sanjay Kapoor, chief executive officer for India and South Asia, said: “We are now seeing traction in that 3G market, the process is getting oiled.”