On the back of the highest number of subscriber addition during the quarter ended June 30, 2009, the country?s largest telecom operator, Bharti Airtel, on Thursday posted a 24.3% jump in its net profit for the period at Rs 2,517 crore. Total revenues jumped 17% to Rs 9,942 crore according to the US accounting standard.

Bharti Enterprises deputy CEO Akhil Gupta said the company’s negotiations with South African telecom major MTN for creating a $20-billion, 200-million subscriber entity was on track. “Our talks are still on. Beyond this, I cannot comment anything because of the confidentiality clause,” Gupta said. Bharti and MTN are in exclusive talks till July 31 for a complex cash-cum-stock swap, which envisages the Indian company picking up a 49% in MTN and the latter a 36% in Bharti.

Gupta said the performance during the April-June quarter had been extremely satisfying with the company crossing the 100-million mark in mobile users. Globally, it is the third company to have achieved that feat after China Mobile and China Unicon. Among the other major achievements, it crossed the 10 billion minutes of usage mark during the quarter. He said that the telecom industry would see sustainable growth in future.

However, concerns regarding the company’s revenue and profitability in the telecom market, which is increasingly becoming more and more competitive, saw its share prices closing down 1.09% at Rs 813.90 on the BSE.

Bharti’s EBITDA during the quarter grew at 18% to touch Rs 4,152 crore. The company recorded strong net free cash flow of Rs 1,500 crore during the quarter, which resulted in reduction of net debt by Rs 2,184 crore. Bharti’s net debt stands at Rs 4,779 crore. Gupta said though the cut-throat competition the telecom sector remained challenging, a strong balance sheet puts the company it in a very good position.

However, the strains of the competition are showing on the company. Average revenue per user (Arpu) dropped to Rs 278 during the period, down 20% from the corresponding quarter of the last year and a 9% decline on a quarter-on-quarter basis. Similarly, the average minutes of usage, which is an indicator of how much talk time is being used, declined by 11% to 478 compared to the last year.

On the policy side, the company has urged the government to stop charging from operators like it the mandatory 5% of the adjusted gross revenue towards the universal obligation fund (USO). “There is a huge amount of money lying unutilised in the USO fund. If the government utilises it well or doesn’t ask us to pay more, we can directly offer the benefits to users,” CEO Manoj Kohli said. Around Rs 14,000 crore is lying in the USO fund.

Bharti’s coverage extends to 82% of the total population. It covers 4,25,000 towns and villages of the total of around 600,000. Around 64% of its net additions is coming from rural areas.

The company’s total mobile subscriber base as on June 30 stood at 105.20 million, an increase of 47% over the year-ago period.