Bharti Profit Beats Estimates as Data Usage Increases

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Bharti Airtel Ltd., India’s biggest wireless carrier, posted profit that beat analyst estimates as rising smartphone ownership drives growth in data usage.

Net income more than doubled to 14.4 billion rupees ($233 million) in the three months ended December from 6.1 billion rupees a year earlier, New Delhi-based Bharti said today in a statement. That exceeded the 13.5 billion-rupee median of 24 analysts’ estimates compiled by Bloomberg.

Billionaire Chairman Sunil Bharti Mittal’s company sees low-cost devices and new technologies driving data usage and in November started a Web portal to help introduce customers to the Internet. With India’s Internet users estimated to more than double to 480 million by 2017, growing smartphone penetration will boost the number of people accessing the Web on their mobile devices, according to Bharti.

“They’re getting some good growth in data,” said Rishi Tejpal, an analyst at Gartner Inc. in New Delhi. “The data revenue hike will continue for a good time as they roll out their 4G network to bigger markets,” Tejpal said, referring to Bharti’s fourth-generation services.

As of the quarter ended September, Bharti was offering 4G services in 15 cities in India. The faster 4G network enables quicker downloads of data.

Smartphone shipments in India rose 82 percent to 23.3 million units in the third quarter of 2014 from a year earlier, according to market research firm International Data Corp. The devices accounted for 32 percent of total mobile phone sales in the period, from 19 percent in the corresponding period.

Sales Gain

Bharti’s sales climbed 5.8 percent to 232.2 billion rupees, according to the company. That compares with the 234.9 billion-rupee median of 25 analysts’ estimates.

Shares of Bharti fell 0.7 percent to 368.95 rupees at the close in Mumbai trading, before the earnings announcement.

Mobile data sales, including at its Africa operations, rose 62 percent to 28.7 billion rupees, contributing more than 85 percent of the incremental revenue, Bharti said. Revenue from data in India climbed 74 percent, boosted by a 32 percent increase in the number of users and a 38 percent jump in usage per customer, it said.

Revenue from Africa, where the company operates in 17 countries, declined 6 percent in rupee terms in the quarter from a year earlier as local currencies including Nigeria’s naira depreciated in value against the U.S. dollar. Earnings before interest and taxes fell 33 percent, according to Bharti.

Idea Cellular Ltd., India’s second-biggest mobile phone operator by market value, posted third-quarter profit that missed analyst estimates. The average realization per minute for voice calls for the company, excluding units, declined from a year earlier as competition intensified.