Billion dollar profits for Bharti

While Vodafone got its green signal, market leader Bharti Airtel welcomed it with its best results ever. Annual revenues have increased 59% to Rs 18,520 crore ($ 4.5 billion*), while net profit has soared 89% to Rs 4,257 crore. ($ 1.04 billion). Bharti's profit is a shade higher than the revenues of India's fifth largest mobile player IDEA Cellular, which recorded revenues of Rs 4412.93 crore ($ 1.07 billion).

Bharti Airtel chairman and group managing director, Sunil Bharti Mittal has announced capex of $ 3.3-3.5 billion (Rs 14,000 crore plus)in 2007-'08. That's in addition to the Rs 31,950 crore that the company has already invested in the network.

Of the additional $ 3.5 billion, 70% will be invested in the mobile network. That includes setting up of 30,000 new base stations (it already has 40,000 in operation), adding more optic fibre (it already has 40,484 route kilometres). It will cover 70% of the country's population as opposed to 59% now. Of the 30,000 new base stations, around 60% (18,000) will be installed in rural areas. By then, its rural coverage will increase from the current 207,327 villages to over 300,000.

Bharti is clearly following the lower ARPU, higher volumes game. After all, it is unlikely that ARPUs will rise.

Now that Bharti has a pretty strong position in India, Mittal is looking at making a global presence. It already runs the Seychelles network. Bharti Global has been awarded licenses to operate 2G and 3G services in Jersey and Guernsey in Europe. The latest has been the acquisition of a licence to start 2G and 3G services in Sri Lanka.

But is Bharti worried about the impending challenge with the entry of Vodafone? Sunil Mittal brushed it off by simply saying: "Is that question for us or them?"

3G SPECTRUM

With communications minister Dayanidhi Maran talking about international bidders for 3G spectrum, Mittal clearly said that they are waiting for the policy. he also added that the existing operators are best positioned to offer 3G as an overlay on their existing 2-2.5G networks.

* Based on an exchange rate of Rs 41 per US dollar.