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India's Bharti Airtel quarterly profit dives 10%

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(Globalpost/GlobalPost)

India's top mobile company Bharti Airtel on Wednesday reported a nearly 10 percent dive in quarterly profit from a year ago, with the carrier hit by foreign exchange losses and other costs.

The year-on-year tumble in profits was the 14th straight decline for Bharti, which has been struggling in a cut-throat market.

But the company, the world's fourth-biggest cellular operator by customers, said it was optimistic about the future as fierce tariff wars wane.

New Delhi-based Bharti reported net profit for the first financial quarter to June fell by 9.6 percent to 6.89 billion rupees ($114 million), from 7.62 billion rupees in the same quarter.

Total revenue in the quarter climbed 9.2 percent to 20.26 billion rupees, while net debt decreased by $908 million to $9.78 billion.

"Results for Airtel India reflect rationality" returning to the hugely competitive sector, Bharti's billionaire chairman Sunil Bharti Mittal said.

Indian mobile firms have reduced discounts and hiked some tariffs as smaller rivals exited the market or reduced their activities following a court order that eased market congestion.

"Our results for the quarter reflect the overall stability of our operations and demonstrate the potential for growth, particularly seeing robust data growth across all geographies," Mittal added.

The company, which has 275 million customers globally -- 191 million of them in India -- took a one-off charge for foreign exchange and derivative losses.

The company said the rupee had lost 10 percent in value against the dollar during the quarter, which it said "has had its effect" on earnings.

The results consolidated the earnings of all Bharti's operations in 20 countries, including 17 in Africa.

The group's Africa operations, which it bought for $10.6 billion in 2010 to extend its global footprint, are still losing money, hurting Bharti's earnings.

India's telecom sector was a market star, but bruising price wars, which pushed call rates to among the world's lowest, removed some of its shine.

Bharti, which has a more than 30 percent India market share, and other operators also face government calls to pay larger fees to renew licences in years ahead.

India's boom in phone connections has been overwhelmingly driven by cellular services, but the sector sees the data services as the next growth driver.

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http://www.globalpost.com/dispatch/news/afp/130731/indias-bharti-airtel-quarterly-profit-dives-10