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Competition, price war takes toll on Airtel
New Delhi, Jan 23 (AGENCIES):
Published on 23 Jan. 2010 11:50 PM IST
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Increasing competition and declining mobile call rates have taken a toll on the earnings of the country’s largest telecom operator, Bharti Airtel, which has posted 2.3% growth in its net profit at Rs 2,209.8 crore for the third quarter ending December 31, 2009, against Rs 2,159.3 crore in the same quarter in December 2008. The revenues rose by only 1 per cent to Rs 9,772.2 crore against Rs 9,633.4 crore in the corresponding quarter of the previous year. The impact of the price war and the fact that over half a dozen new players have got into the market was reflected in the flat growth in revenues of the mobile business and the Ebitda (earnings before interest, taxes, depreciation and amortisation) fell by 3%. The key parameters are down. The average revenue per user (ARPU) fell by 9% in the reporting quarter over the previous quarter ending September 30, and so did average minutes of use per user (went down 1 per cent). The average rate per minute also dropped by 8%, from 56 paise in September-end to 52 paise in December, reflecting the price war. Worse, the company is getting a smaller share of the incremental new additions due to new players in the marketplace. Experts say the lower growth in revenues was due to a combination of factors — the delayed response of the company to the one second, one paisa pulse rate challenge kicked off by Tata Teleservices and others, the ban in mobile services in Jammu & Kashmir (were it has a 65% market share) and also the loss of subscribers due to blocking of numbers which were using Chinese mobile phones without an IMEI number.

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