Bharti seeking JV takeover as profits slide

Indian telecom giant Bharti Airtel has reported that its Q4 profit and revenue have fallen short of forecasts. For the quarter ending March 31, the Indian market leader’s profit dropped by 28% to US$200 million. Revenue meanwhile rose 15% to US$3.7 billion.

The group’s net income dropped 30% to US$890 million over the entire fiscal year, with revenue up 20% to US$14.9 billion. Bharti has stated that 3G costs were a major cause of the shortfall, with licence fee payments totalling US$135 million and interest at US$95 million. It also lost US$169 million through taxes and foreign exchange fluctuations.

The group’s chairman and MD Sunil Bharti Mittal stated: “the recent regulatory developments in India will have significant implications on the future of telephony and broadband, as well as India’s global competitiveness.”

The group’s fortunes appear to be looking better – Bharti launched India’s first 4G network in April using TD-LTE technology, and is rumoured to be negotiating the acquisition of 4G licences for the key Indian circles of Delhi and Mumbai.

National newspapers have claimed that Bharti is attempting to acquire Qualcomm’s stake in a joint venture that the two firms created as a means of gaining licences for Broadband Wireless Access spectrum. Bharti has reportedly offered to pay INR60 billion (US$1.1 billion) for the 74% stake.

In addition to Delhi and Mumbai, Qualcomm’s BWA spectrum licences cover the crucial regions of Kerala and Haryana. A deal is highly likely due to Qualcomm’s affirmation that it will exit the market once its joint venture has commenced operations.

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