New Delhi / Mumbai: Bharti Airtel Ltd and Reliance Communications Ltd (RCom), India’s top two mobile phone service providers, grew their net profits at record levels in the quarter ended September, setting them well on the way to exceed $1 billion, or nearly Rs4,000 crore, in earnings this fiscal year.
The country’s No. 1 wireless phone company by customers, Bharti Airtel grew its net profit 73% to Rs1,613 crore on revenues of Rs6,337 crore, up 45%, as it extended its network coverage to nearly 300,000 towns and villages.
Net profit at RCom grew faster at 86% to Rs1,305 crore on revenues of Rs4,579 crore, which were up 30%.
India is the fastest growing mobile phone services market in the world by customers, but phone companies here have to manage operations with among the lowest monthly average billing. Bharti added 6.17 million users in the quarter and RCom signed up 4.46 million.
But the surging profits “gives an indication of the opportunity” here, said Kawaljeet Saluja, telecom analyst at Mumbai’s Kotak Securities Ltd.
Bharti expanded its market share by two percentage points to 23.4% as it extended its network to an additional 520 towns and 135,000 villages. It ended September with 48.9 million mobile subscribers.
RCom had a 17.4% market share in a country with 209.1 million wireless subscribers. Its share has narrowed from 20.5% a year earlier after it had to disconnect users who couldn’t be verified according to government regulations.
Bharti Airtel’s revenue per user declined by almost 6% on a quarterly basis from Rs390 last quarter to almost Rs360, a trend expected to continue as the company expands to the rural areas to sustain growth. Average monthly billing at RCom, too, shrunk to Rs361 from Rs375.
Shailendra Bhatnagar of Bloomberg contributed to this story.