NEW DELHI: India's biggest mobile phone operator Bharti Airtel on Friday announced a larger-than-expected 38 percent dive in quarterly profit as higher interest costs and foreign exchange losses gouged earnings.
New Delhi-based Bharti reported net profit slid to 10.3 billion rupees ($210 million) in the second quarter from 16.61 billion rupees in the same period a year ago.
The earnings for the three months to September undershot analysts' expectations that profit would total around 13 billion rupees.
Profit was undermined by a tripling of interest loan costs from Bharti's $10.7 billion purchase last year of the African mobile operations of Kuwait's Zain, while foreign exchange losses were another drag.
But total revenues climbed 13.4 percent to 172.7 billion rupees. Bharti's revenues in Africa surged 23 percent from a year earlier to cross $1 billion on a quarterly basis for the first time.
"This year is progressing well for Bharti Airtel," said billionaire founder and chairman Sunil Bharti Mittal.
The purchase of Zain's operations made Bharti the fifth-largest mobile operator globally with 237 million subscribers across 19 countries, and 173 million customers in India alone.
Mittal said the company, nearly one-third owned by Singapore's SingTel, had raised calling rates, arresting a trend toward declining mobile tariffs in India.
The falling call rates had been triggered by a price war among the 14 telecom players that now is expected to ease with new government rules aimed at spurring mergers and acquisitions in the world's second-largest telecoms market.
The Indian government has said the changes should reduce the number of operators across the country to just five or six.
According to analysts, mergers are the only way forward in India's crowded mobile phone market to boost revenues where subscriber rates are still among the cheapest in the world.
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