| Corporate | | | Africa operations brings down Bharti airtel profits | | | | | 06 May 2011 | | |   Telecom major Bharti airtel, whose profit has come under severe pressure in the fourth quarter of 2010-11 due to higher cost of African operations, on Thursday said it is expecting the African arm to post a much better performance this year.
“Africa is a very competitive market and it’s been only nine months since we have acquired Zain’s African operations. The costs are very high in that region, but now we have a good presence there,” airtel Africa CEO and joint managing director Mr Manoj Kumar Kohli told reporters.
Last year, the company had completed the acquisition of Zain’s African operations in 16 countries for an enterprise value of $10.7 billion.
For FY’12, airtel Africa will make a capital expenditure in the range of $1—1.2 billion. The Government regulations are stringent but are now going down, the company said.
Mr Kohli admitted that the company is having supply constraints in Africa but assures that it will be taken care of. He added that the company expected operating margins of the African arm to increase in the coming quarters.
During the quarter ended March 31, 2011, airtel incurred a capital expenditure of $382 million on its African arm.
The group company Bharti airtel today reported 31 per cent decline in its consolidated net profit at Rs 1,400.7 crore during fourth quarter ending March 31, mainly due to high cost of African operations, re—branding expenses and high spectrum charges.
“The acquisition in Africa has turned airtel into the fifth largest company in the world in terms of customers,” Bharti airtel’s parent Bharti Enterprises deputy group CEO Akhil Gupta said adding that the revenue share in Africa is going up.
During the quarter ended March 31, airtel Africa had a loss of Rs 87.8 crore, while revenues stood at Rs 4,181.5 crore during the period. It has over 44 million customers across 16 African countries with average revenue per user at $7.2 per month. |
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