Bharati Q4, Earnings

Bharti Airtel Ltd. came up with its latest 4th Quarter figures, beating the forecasts. India became the world’s fastest growing telecom market. Now it boasts of more than 150 million subscribers, which shows that still only 15% of the country’s population is covered. The projections made by Sunil Mittal look forward to tripling of the total customer base within five years. Which means that around half of the population would be using mobiles.

Bharati which is the telecom leader in India boasts a subscriber base of 39.02 million as on March 07 and has become one of the largest companies in India. It has the third highest market capitalization of more than $40 billion. This means that the company has a total weight of close to 7.5% in NSE Nifty compared to around 10% weight of both ONGC and RIL. It is interesting to note that RCOM (Reliance Communication) has a weight of 4%.

Bharti has relied on GSM technology for its growth compare to RCOM which relies on rival CDMA technology. The battle between these two companies extends from customer base to technology. With introduction of 3G in India the market place will become complex. Already Anil Ambani has shown interest in the rival GSM technology on a limited scale to leverage on 3G techonology.

Bharti for long has maintained a good lead over the competitors. It has maintained its position as a favorite for foreign investors. Currently SingTel (South East Asia’s largest Tel. Comp) holds around 30.8% of the company. Before Vodafone, world’s largest telecom company also held a strategic 10% stake in the company.

Bharti is seeking more efficiency by outsourcing majority of its telecom operations. Bharti’s share rose 21.4% between January and March this year compare with 5.2% in the benchmark index. Bharti’s shares were down 2% at around Rs. 844 compared to the 1.6% drop in the index.