Bharti acquires Telecom Seychelles
Bharti Airtel is back on the acquisition trail with another African purchase, despite net profits falling 32% in its fiscal 1Q10, which covers calendar 2Q.
The Indian telco today revealed it is purchasing Telecom Seychelles for $62 million (€47 million), expanding its presence in Africa to 16 countries, the Times of India reports.
Bharti’s latest move in Africa comes just two months after it snapped up Zain Telecom’s assets for $10.7 billion, which opened the door to 15 African countries.
The acquisition comes despite a drop in fiscal 1Q10 profits to $361 million, as fierce competition in the telco’s domestic market, 3G license acquisition costs and losses from a strengthening US dollar drove the figure down from $531 million a year earlier.
Revenues grew 17% to $2.6 billion, however the firm failed to translate an increase in usage from an average of 468 minutes per user in 4Q09 to 480 minutes in 1Q10 into ARPU, which fell from 220 rupees (€3.62) in 4Q to 215 rupees.
Despite the tough conditions, EBITDA was up 5% year-on-year at $968 million.
Sunil Bharti Mittal, the telco’s chairman and MD, said a price war in India had actually benefitted the firm, by boosting its performance in core India and South Asian markets.
Revenues from the territories grew 8.2% to $2.4 billion during the quarter, as subscriber numbers increased 7% to 140.6 million.
“Our business in India and South Asia got off to a solid start with robust revenue growth and healthy margins,” Mittal said, adding. “This reaffirms our conviction that leaders emerge stronger in a hyper competitive market.”
Karvy Stock Broking analyst Harit Shah said Bharti’s performance in India was “heartening,” and tipped the firm to improve ARPU in fiscal 2Q as the price war in the country dies down, WSJ.com reported.