Qualcomm Inc (QCOM)

[khemara_qc]

Bharti quadruples final quarter profits on back of mobile boom


April 26, 2004

Reuters

Bharti Tele-Ventures profits quadrupled after it doubled subscribers in the world's fastest growing wireless market.

The company posted a consolidated net profit of 699.8 million rupees in the fourth quarter last year and 1.61 billion rupees last quarter.

Bharti's fourth-quarter operating margin rose to 34% from 26% a year earlier. Other income surged to 227.5 million rupees from 21.2 million rupees, while interest costs fell to 342.8 million rupees from 518.1 million rupees.

Bharti aims to boost its mobile user base to 25 million by the end of 2005 on the back of a massive expansion drive and explosive demand in the billion-plus nation.

"Growth has been delightful," chairman Sunil Mittal said." I still envision a market size of 100 million users by December 2005 and we can legitimately claim 20 to 25 million users."

The company currently has 6.5 million mobile users, giving it a 19.5% share of a market expanding by 1.5 million to 1.9 million users a month thanks to some of the lowest tariffs in the world.

While the operational performance was in line with forecasts, analysts said investors were pleased with an unexpected rise in other income, tax write-backs, as well as lower interest costs.

"There's still an upside to the stock as the country's mobile phone market is set to expand rapidly," said Rahul Singh at SSKI Securities, who has a target price of 210 rupees for end-August.

Only three in a 100 people own a mobile handset in India compared with 21 per 100 in China and more than 60 in Europe.

Bharti said earlier this month its total customer base, including fixed-line users, doubled to 7.14 million. It is expanding to cover the entire nation and recently bought rival Hexacom India for 4.3 billion rupees.

Bharti plans to spend between $700-$750 million in the year to March 2005 to take on Reliance and other rivals such as state-run Bharat Sanchar Nigam. Reliance sells both GSM and CDMA services.

"Roughly two-thirds of the amount will be toward the mobile side and one-third on the fixed-line side," said Akhil Gupta, joint managing director at Bharti. The amount would be raised through internal cash generation and overseas borrowings.

Bharti also competes with another CDMA operator, the Tata group, as well as a unit of Hutchison Whampoa.

One of the industry's earliest entrants and also one of its most aggressive players, Bharti earns more than two-thirds of its revenue from mobile services. It sells wireless services in 15 of the 23 zones, or circles, that make up India's market.

http://www.telecomasia.net/telecomasia/article/articleDetail.jsp?id=93260