Bharti reports 27 per cent slump in Q2 net profit

Bharti Airtel Ltd, India's largest mobile-phone operator, reported a 27 per cent slump in net profit, as the company cut call rates to win a larger share of the market in Africa and compete with 14 other companies in India. 

Second-quarter net income dropped to Rs1,660 crore ($374 million) in the three months ended 30 September from Rs2,260 crore a year earlier, New Delhi-based Bharti said today. That lagged behind the Rs1,780 crore average of 27 analyst estimates compiled by Bloomberg. 

Intensifying competition with Vodafone Group Plc and Reliance Communications Ltd. drove Bharti's monthly phone bills in India down 20 per cent in the quarter. Chairman Mittal has expanded the company into countries including Kenya and cut call rates to win customers after the $9 billion purchase of African assets from Kuwait's Mobile Telecommunications Co. 

 ''We've modified our tariffs in 10 markets out of 16,'' Manoj Kohli, chief executive officer of Bharti's Africa business, said today in a press briefing. ''In some markets, we had an unsustainable premium of 30 to 40 per cent.'' 

Zain Kenya, a unit of Bharti, on 18 August cut domestic call rates in half to 3 shillings (4 cents) a minute. 

In India, Japan's NTT DoCoMo Inc and Norway's Telenor ASA triggered a price war last year when they entered the country with cut-rate plans to win a larger share of a market that is forecast by researcher Gartner Inc to exceed 993 million users by the end of 2014. India had 671 million mobile-phone accounts in August, according to the phone regulator, lagging behind only China.