Oct. 30 (Bloomberg) -- Bharti Airtel Ltd., the Indian operator that failed to merge with MTN Group Ltd., reported profit growth slowed for the ninth quarter as competitors cut call charges in the world's second-largest wireless market.
Bharti's shares fell to the lowest level in seven months after the New Delhi-based company said net income increased 13 percent to 23.2 billion rupees ($494 million) for the three months ended Sept. 30, from 20.5 billion rupees a year earlier.
India's largest mobile-phone company and closest rival Reliance Communications Ltd. are the nation's worst-performing benchmark stocks this year as competitors including Japan's NTT DoCoMo Inc. sign up more callers. Bharti director Rajan Bharti Mittal said yesterday consolidation is inevitable because there are "too many" operators.
The results are "a sign that competition is beginning to heat up," said Theo Maas, who supervises investments of A$5 billion ($4.6 billion) including Bharti shareholder Singapore Telecommunications Ltd., at Fortis Investment Partners in Sydney. "The end game is really consolidation in the whole industry."
Tokyo-based NTT DoCoMo, Japan's largest wireless operator, is luring customers with pay-per-second calls and Reliance is offering plans with call rates as low as 1 U.S. cent a minute.
Bharti fell 6.1 percent to close at 292.85 rupees, the lowest level since March 20. The stock has lost 18 percent this year, trailing a 65 percent advance by the benchmark Sensitive Index. Mumbai-based Reliance, which reports earnings tomorrow, declined 7.3 percent to 175.85 rupees.
'Competitive Intensity'
Net income at Bharti, controlled by billionaire Chairman Sunil Mittal, compares with the 23.5 billion rupee median of 31 analyst estimates compiled by Bloomberg.
Mittal's failure this year, for the second time in as many years, to merge with MTN, Africa's biggest wireless company, may spur him to seek opportunities overseas, even as global industry leader Vodafone Group Plc and Reliance narrow Bharti's lead.
Vodafone increased its share of wireless users in India to 17.7 percent at the end of August from 17.3 percent a year earlier, while Bharti's fell to 23.6 percent from 24.5 percent in the same period, according to figures from the Telecom Regulatory Authority of India. Reliance increased its market share to 18.4 percent in 12 months, from 17.8 percent.
Sales rose 9.2 percent to 98.5 billion rupees, and compared with analysts' median estimate of 102.7 billion rupees. Bharti had 113.4 million customers at the end of September, more than the combined populations of Spain and the United Kingdom, the carrier said today.
The Indian wireless operator will pursue all strategic opportunities in emerging markets, Akhil Gupta, deputy chief executive officer of parent Bharti Enterprises Pvt., said today. He said the company would also aim to expand its non-mobile businesses including data and direct-to-home broadcasting.
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