India’s largest telecom service provider Bharti Airtel on Wednesday reported a 28% fall in net profit at Rs 1,215.2 crore for the quarter ended June against Rs 1,681.6 crore a year ago, hit by the costs of its Africa acquisition and investments in 3G services.
Bharti last year acquired Zain Telecom’s Africa operations for $10.7 billion to become the world’s fifth-largest mobile operator.
The company incurred an interest outgo of Rs 344.0 crore on the Africa acquisition as well as on 3G investment in India, and 3G licence fee amortisation of Rs 159.0 crore during the period under review.The rise in effective tax rate for the quarter to 29.9%, mainly due to a reduction in tax holiday benefits in India, also affected profits.
Revenue rose by 39% to Rs 16,975.0 crore during the April-June quarter against Rs 12,244 crore in the year-ago period.
“Bharti Airtel has started this fiscal year on a stable note. Revenue growth has been steady across all geographies, with Africa recording a healthy sequential growth of approximately 6% and annual growth of 21%,” said Sunil Bharti Mittal, chairman and MD, Bharti Airtel.
The company’s income before taxes taxes dropped to Rs 1,719.0 crore in the first quarter against Rs 2,072.0 crore a year-ago.
The company also announced that its top officials including Mittal will not get any pay hike during this financial year.