Bharti Profit Trails Estimates Amid Competition in Africa

Bharti Airtel Ltd., India’s largest wireless carrier, reported first-quarter profit that missed analysts’ estimates as competition crimped earnings growth at its operations in Africa.

Net income jumped 61 percent to 11.1 billion rupees ($185 million) in the three months ended June from 6.9 billion rupees a year earlier, New Delhi-based Bharti said today in a statement. That lagged behind the 12 billion-rupee median of 24 analysts’ estimates compiled by Bloomberg.

Billionaire Chairman Sunil Mittal’s company operates in 17 African nations and is competing with carriers including MTN Group Ltd. to woo users. Bharti this month agreed to sell more than 3,000 telecommunication towers in four countries on the continent to reduce debt and lower spending on infrastructure.

“There are pricing pressures from smaller marginal players across Africa,” Aliasgar Shakir, an analyst at Elara Securities (India) Pvt. in Mumbai, said before the earnings announcement. “In the near term, we won’t see very significant improvements from Africa for Bharti.”

Shares of Bharti fell 0.2 percent to 353.95 rupees yesterday. They have gained 7.2 percent this year, compared with the 23 percent jump in India’s benchmark S&P BSE Sensex. The markets are closed today for a holiday.

Sales rose 13 percent to 229.6 billion rupees in the period, surpassing the 226.3 billion-rupee median of 24 analysts’ estimates compiled by Bloomberg.

Africa Growth

Earnings before interest, taxes, depreciation and amortization at Bharti’s India and South Asia business increased 22 percent from a year earlier, outpacing the 7 percent Ebitda growth at the Africa operations in the period. Data average revenue per user grew faster in India and South Asia at 22 percent, compared with 17 percent in Africa. Total data usage doubled in both the markets.

“Telecoms are back to growth in Africa, this time spearheaded by Internet and mobile money,” Bharti’s Africa Chief Executive Officer Christian de Faria said in the statement. “Our investments in licences, networks and marketing are directed towards sustaining double-digit revenue growth.”

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