(Reuters) - India’s biggest mobile carrier Bharti Airtel Ltd reported a smaller-than-expected quarterly net profit after the country’s telecoms regulator more than halved interconnection fees last year.
Net profit fell 39.3 percent to 3.06 billion rupees ($48 million) in the quarter ended Dec. 31, missing an average estimate of 3.98 billion rupees from 10 analysts, according to Thomson Reuters data.
India’s telecoms regulator cut interconnect usage charges (IUC) - the fees that mobile operators pay each other for calls from one network to another - by more than half to 0.06 rupees a minute from October, and plans to abolish them from 2020.
The sector has also been hit hard by a price war since the entry of carrier Reliance Jio, the telecoms arm of Reliance Industries Ltd, more than a year ago.
"Regulatory fiat in the form of a cut in domestic IUC rates has exacerbated the industry ARPU (average revenue per user) decline in Q3'18. The recent announcement of reduction in international termination rates will further accentuate this decline," Gopal Vittal, Bharti Airtel's managing director and chief executive for India and South Asia, said in a statement on Thursday. (bit.ly/2rk5hJG)
Revenue from mobile services in India fell 22.2 percent to 107.51 billion rupees, while overall revenue dropped 13 percent to 203.19 billion rupees.
Bharti’s shares fell nearly one percent. They climbed 73.2 percent in 2017, helped by the company’s acquisition strategy and other measures to tackle competition.
($1 = 63.8525 Indian rupees)
Reporting by Tanvi Mehta in Bengaluru; Editing by Alexander Smith and Mark Potter