Bharti Profit Beats Estimates on Increased Data Usage

Bharti Airtel Ltd. (BHARTI), Indias largest mobile-phone services provider, reported profit that beat analyst estimates as customers spent more time browsing the Internet, exchanging e-mail and downloading songs and photos.

Net income more than doubled to 13.8 billion rupees ($225 million) in the fiscal second quarter, the New Delhi-based company said in a statement today. Profit surpassed the 13 billion-rupee median of 24 analysts estimates compiled by Bloomberg.

Billionaire Chairman Sunil Mittals company joins smaller competitor Idea Cellular Ltd. in posting profit that exceeded estimates as a proliferation of low-cost smartphones spurs a surge in mobile Internet access. Bharti introduced a music streaming application last month in a bid to boost data usage.

Low-cost smartphones such as Google One devices costing under $100 should help boost data penetration, Praveen Menon, a New York-based analyst at Bloomberg Intelligence, said in an e-mail before the earnings announcement. This would benefit Indian telcos such as Bharti, especially in rural areas.

Mobile data sales, including at its Africa operations, rose 67 percent to 25.4 billion rupees, contributing more than two-thirds of the incremental revenue, Bharti said. Mobile data revenue in India climbed 74 percent, boosted by a 43 percent increase in the number of users and a 31 percent jump in usage per customer, it said.

We continue to see strong momentum in mobile data, Gopal Vittal, chief executive officer for India and South Asia, said in the statement. The companys introduction of fourth-generation services in 15 cities is now witnessing stronger customer acceptance, he said.

The average price of smartphones sold in India has declined by more than $100 in the past three years to $142, according to Bloomberg Intelligence.

Idea, the third-largest Indian wireless carrier, on Oct. 20 reported better-than-estimated profit of 7.56 billion rupees after data volume more than doubled.

Sales at Bharti increased 7 percent to 228.5 billion rupees in the three months ended September, missing the the 232 billion-rupee median of 24 analysts estimates.

Bharti rose 0.6 percent to 407.50 rupees at the close in Mumbai trading, before the earnings announcement. The stock has gained 23 percent this year, compared with a 29 percent increase in the benchmark S&P BSE India Sensex Index.

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Bharti Profit Beats Estimates on Increased Data Usage