Operating profit in Africa to go up: Bharti

Telecom major Bharti Airtel, whose profit declined 28% in Q1 due to higher cost of African operations, today said it expected its operating profit in Africa to improve in coming quarters.

"We expect steady improvement in operating profit from Africa in coming quarters," Bharti Airtel Chief Executive Officer (International) and Joint MD Manoj Kohli said on a conference call.

During the quarter, Bharti Airtel incurred a capital expenditure of $420 million on its African operations.

The company had earlier said it would make a capital expenditure in the range of $1-1.2 billion in its Africa business in FY12.

The parent group Bharti Airtel posted a nearly 28% decline in net profit to Rs 1,215.2 crore in the quarter ended June 30, 2011, mainly on account of higher interest outgo (Rs 344 crore on the Africa acquisition) and 3G investments in India and 3G licence fee amortisation (Rs 159 crore).

Last year, Bharti Airtel acquired Zain's African operations in 16 countries for $10.7 billion to become the world's fifth-largest mobile operator.

Though Bharti Airtel is yet to turn profitable in Africa with high costs keeping margins under pressure, company officials are upbeat on the business in the continent.

For the quarter ended June 30, Airtel Africa revenues stood at $979 million and has added 2.1 million new subscribers to take its user base to over 46 million customers across 16 African countries.

The Average Revenue Per User for the quarter was $7.3 per month, while the average minutes used per customer, during the quarter, stood at 121 minutes.

About 213 people left Bharti Airtel's Aifrica operations during the qaurter, taking its headcount in the region to 5,474 people.

The company offers mobile services using GSM technology in South Asia across India, Sri Lanka and Bangladesh, serving over 167 million customers in these geographies.