Bharti Infratel - for which it received USD583m. Also, the Indian government's decision to allow such fees to be paid in phases - one-third upfront and the rest over the remaining life of the license - will help the company in managing its cash flows. While this payment is currently under dispute by Bharti and an Indian High Court has stayed the demand of such charges, Fitch believes Bharti's annual cash outflow from the one-time fee will be a maximum of USD200m.
Also, following the limited participation in the auction held for 1800MHz auction in November 2012, where only 42% of the offered spectrum was sold, the Indian government reduced the spectrum price of unsold circles by 30% (mainly Delhi and Mumbai) and the spectrum price of CDMA by 50%. The government is planning to hold another auction of the 900MHz and 1800MHz spectrums in March 2013. The price of spectrum in 900MHz has been fixed at two times the price of airwaves in the 1800 MHz spectrum, although it is probable that the final price may be lower.
Bharti's nine months ended December 2012 (9M12) results were in line with Fitch's expectations. Revenue and EBITDA rose by 14% and 5% respectively year-on-year due to a growing Indian and African subscriber base. EBITDA margin, however, deteriorated by 200bps to 31% on higher network operating costs (+21%) and marketing cost (+22%) as the company rolled out its 3G network and competed aggressively to regain its lost revenue market share. Also, Bharti's leverage will benefit from its downward FY13 capex revision to USD2.5bn-2.6bn from USD2.8bn-3bn earlier.
Bharti Airtel profit sinks, misses estimates
(Reuters) Profit at India's top mobile network operator Bharti Airtel Ltd fell for the twelfth successive quarter, with higher costs dragging its results well below market expectations.
Bharti Airtel, controlled by billionaire Sunil Mittal, said consolidated net profit fell to 2.84 billion rupees ($53.39 million) in the fiscal third quarter that ended Dec. 31, from 10.11 billion rupees a year earlier.
Revenue rose 9.5 percent