It has been a good run for Bharti Tele Ventures, the largest private telecom service provider in the country. By flagging off its services in Assam (Guwahati), the company has announced the completion of its nationwide network across 23 circles, making it the largest telecom network in the country at the moment.
The launch came a little before the telecom major announced its financial results for the year 2004-05. The results only reinforced the company’s strong position in the market and showed it was in full form to take on its rivals.
Bharti reported net profits that were 132 per cent higher than the previous year. The net profit for 2004-05 stood at Rs 14.39 billion while the revenue crossed Rs 80 billion. Quarterly profits registered a hike of 44 per cent while the revenue grew 49 per cent during the fourth quarter, compared to the same period last year.
“Our fourth quarter revenues have taken us into the $2 billion club,” stated chairman and managing director of Bharti Enterprises, Sunil Mittal. “We have invested Rs 170 billion so far and this year, we propose to pump in another Rs 40 billion. Part of the investment will be in existing towns to decongest traffic while the rest of the money will be used to roll out services in new towns and cities.
“This marks the completion of our long-term vision of covering the entire country and now we are ready to look at new initiatives,” he added.
The company is aiming to cover up to 300,000 villages in the new fiscal year. While it set up 10,000 base stations in the last 10 years, this year it plans to ambitiously add another 10,000 base stations, to reach every corner of the country. For this, it has set aside capital expenditure of $850-$900 million.
For integrated telecom players, it would have connected most of the striferidden north-eastern states on its cellular network by the end of this fiscal year. Envisaging an investment of Rs 1.3 billion, Bharti plans to make its services available in most of the towns in the region, including Shillong, Jorhat, Tezpur, Naogaon, Tinsukia and Dibrugarh in the Assam circle by May. Agartala, Itanagar, Dimapur and Imphal would be covered subsequently.
As of March 31, 2005, Bharti has a cellular subscriber base of 10.98 million. It intends to reach 15 million subscribers by 2005-06. These ambitious plans are not limited to cellular services alone. The company is planning to aggressively expand its fixed line and broadband telecom services. By the end of phase one ?? over the next 18 months ?? these services should be available across the country.
The other area of focus for the company is rural telephony. By the end of the current fiscal year, it hopes to deliver services to roughly 300,000 villages in the country.
At the same time, Bharti is publicly announcing its readiness to kickstart 3G services on a national level over the next 18-20 months. For this it has earmarked an investment of around $1 billion to upgrade its network to 3G-compliance, in order to enable mobile users to access broadband services on the move. However, the plan is contingent on TRAI giving it the go-ahead and allocating suitable spectrum.
The only cloud on its horizon right now is the issue of access deficit charge (ADC). TRAI recently decided to impose ADC on national and international roaming calls being routed through the network of state-owned telecom major Bharat Sanchar Nigam Limited (BSNL). If implemented, national roaming subscribers will have to pay Re 0.30 over the current rates of about Rs 5.25 a minute. Similarly, foreigners and NRIs travelling to India will have to pay Rs 3.25 extra.
Bharti officials say the company is likely to appeal against this move. If the decision is not revoked, the company would have to perforce pass on the ADC burden to its national and international roaming subscribers, which would then be paid to BSNL.
Other than this, Bharti seems strongly placed in the market. With a market capitalisation of Rs 370 billion, a presence in all 23 circles of the country, a 26.8 per cent share in the GSM market and 21.2 per cent share in the overall telecom market, the company is all set to expand its frontiers.
It is optimistic about its proposed American depository receipt issue which, according to market speculation, will take place sooner than expected. With the completion of its annual results exercise, the company can approach its shareholders for strong participation.
