Airtel results could herald revival in Indian telecoms

31 July 2013 | Kavit Majithia


India’s mobile segment could be set to rebound after this morning’s news that Bharti Airtel’s shares rose by more than 6% following a positive set of Q1 results.

The sector has recently been faced with a range of challenges, including declining margins and regulatory issues facing the competitive landscape.

Airtel reported a net income of $112 million, down by 10% from last year, and continued three years of quarterly profit declines, but heavily defied analysts predictions of a much sharper downturn.

India’s largest operator aggressively invested in its domestic division in 2012, with the view of regaining its market share, while also increasing call charges earlier this year.

Sunil Mittal, chairman at the company called on regulators to open the market further for growth following the news.”The results reflect rationality returning to the sector, which needs to be complemented by a more enabling regulatory environment for a deeper penetration of telecom and broadband services,” he said.

Following the company’s strategy to invest internationally, starting with Africa, it has grown substantially and is now established as the fourth largest operator globally.

The Financial Times reports the company is however struggling with its international division, despite losses curbing slightly to Rs7 billion during this quarter, but this is also an improvement from deteriorating results earlier this year.

Airtel was recently boosted by an investment from the Qatar Foundation Endowment, which bought 5% of the company for $1.3 billion.