Bharti Airtel, India’s largest phone company reported its steepest-ever drop in earnings on Friday. The firm’s second quarter net profit plunged 38% to Rs1,027 crore. That was on a revenue increase of 13% to Rs17,270 crore. Broken up, that’s a 11.7% rise in South Asia and a 22.9% increase in Africa. Airtel has now reported drops in profits for a seventh quarter in a row.
Staying with the industry, voice calls on your mobile phone could become free in a few years. Telecom regulator Trai has recommended eliminating the charge for switching a call from one operator’s network to another. This so called interconnection tariff currently stands at Rs0.20 per minute. Trai made its recommendation to the Supreme Court following a dispute among operators. Large operators with extensive networks want the interconnection fee to be high. But smaller telcos stand to benefit from lower tariffs.
Troubled firm SKS Microfinance is finally on its way to getting more capital. The company’s board has approved a sale of shares to institutional investors through the so-called QIP process. The shares issue is slated to be worth Rs900 crore. What’s more, the SKS board has also increased the authorized share capital to Rs135 crore from Rs95 crore. SKS Microfinance and other MFIs were battered last year after an Andhra law severely cut into their ability to recover payments from borrowers. Banks in turn, stopped lending to MFIs.
Since then, SKS has reduced the significance of its Andhra portfolio, which now accounts for barely 20% of its loan book compared to around 26% at the time the law was passed.
Switching to aviation, Mumbai’s revamped airport could end up costing a lot more than previously estimated. The airport’s main operator, GVK has revised estimates for modernization to Rs12,300 crore from the earlier Rs9,800 crore. The initial estimate for modernization back in 2006 was Rs5,826 crore. The project to revamp Mumbai’s cramped airport facilities has been plagued by time and cost overruns. Delhi’s airport has also gone through cost overruns of its own, with a current price tag of Rs12,700 crore. Operators typically transfer some of the higher costs to passengers by charging higher user fees.
The Supreme Court has granted bail to Satyam founder B. Ramalinga Raju. Raju is the main accused in the Satyam accounting scandal. The court also gave bail to his brother B. Rama Raju and the company’s then CFO, Vadlamani Srinivas. The three men have been in prison for two years and eight months.
Meanwhile, DMK leader Kanimozhi and seven others have been denied bail in the 2G spectrum case. A special judge turned down their bail pleas, calling the accusations against them serious. Kanimozhi has now been behind bars for five months.