Thursday, April 30, 2009

Bharti shines in India

India's top telcom company, Bharti Airtel, is expected to report quarterly profit rose by a fifth as it benefits from a strategy of keeping tariffs steady, while rivals cut prices to boost market share.

Cheaper call tariffs and expanding networks have helped mobile operators add subscribers at a furious pace, making India the world's fastest-growing wireless market.

The country added a record 44.6 million subscribers in January-March, boosting the total to 392 million, after the No. 2 player Reliance Communications expanded its GSM network and rivals such as Vodafone Essar and Idea Cellular also expanded.

In contrast, the China's mobile phone industry is slowing.

China Mobile, the world's largest mobile carrier with about 490 million subscribers, said last week its first-quarter net profit growth slowed to 8 percent, despite a near double-digit rise in revenue.

Consultancy Gartner expects the number of India's mobile phone subscribers to nearly double to 900 million by 2015.

"High competition in the sector will ensure their administrative cost, marketing cost will go up."

As companies expand to small towns, average revenue per user and minutes of usage, two key measurements of performance, have been under pressure as users in rural areas talk less on phones and some use phones only to answer calls.

In India, Bharti, about 31 percent owned by Southeast Asia's top phone firm SingTel, has a market share of about 35 percent, followed by Reliance with about 28 percent.

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