Bharti rides cellular wave

Updated: Mar 28 2005, 05:52am hrs
Bharti Tele-Ventures Limited (BTVL) was incorporated in 1995 as an 80:20 joint venture between the Bharti Group and STET International Netherlands NV. In February 2002, BTV completed an initial public offering (IPO) of 185.34 million equity shares at a premium of Rs 35 per equity share. By 2004, the promoters held 46.6% of the outstanding paid-up capital of BTV. BTVs businesses include cellular, fixed line,

NLD and ILD and broadband services. BTV conducts its business through its subsidiaries- Bharti Cellular Ltd or BCL (21 cellular mobile circles), Bharti Hexacom Ltd or BHL (operates the Rajasthan cellular mobile circle), and Bharti Infotel Ltd. or BIL (broadband & telephone services, long distance services and enterprise services).

Cellular services constitute the largest portion (65% during FY2004) of BTVs business both in terms of customers and revenues. BTV is the largest GSM operator in the country, with 10.24 million subscribers by January 2005, accounting for a service area market share of 26.7%. BTV had a fixed subscriber base of 0.81 million by January 2005.

Due to the significant increase in cellular connections, BTVs revenues have accelerated over the past years. Slower increase in operating costs and economies of scale have resulted in improved margins. Operating margins improved from 21% in FY2002 to 33.3% in FY2004.

BTV also achieved net profitability during FY2004. During 9MFY2005, BTV reported revenues of Rs 57.17 billion, making it the largest listed telecom services provider in India. Net margins increased from 9.2% during 9MFY2004 to 17.5% during 9MFY2005.

Even as BTV remains the largest GSM operator, competition is expected to increase in the Indian telecom industry. BTVs major competitors include players such as BSNL, Reliance, Hutchison, MTNL, and Idea Cellular. Key elements of BTVs competitive strategy could include high investments in the GSM services market, encourage higher speed mobile data services, expansion in ILD and NLD markets, and further developing network to improve services.