Bharti Airtel: Africa starts to pay off | beyondbrics | Financial Times – FT.com

Shares in Bharti Airtel, India’s biggest mobile carrier, closed down 6.58 per cent Wednesday – compared to a 0.48 per cent gain in the Bombay Stock Exchange’s benchmark Sensex – after the company released results for the quarter ending in December that revealed its eighth straight loss in quarterly profits.

The drop in the share price erased most of the gains the company had made after the licenses of some of its smaller rivals were pulled by the telecoms ministry last week.

But the world’s fifth biggest carrier found a bright spot in Africa, where, despite the fact that the business has yet to turn a profit, the company’s huge investments are finally starting to bear fruit.

As beyondbrics reported, the company’s African operations were weighing the company down as recently as the quarter ending in March 2011, but analysts said that going forward, as growth in India stagnates, Africa is likely to prop the company up in the near-to-medium term.

“In the next quarter I see the environment not changing for Bharti … but I think the trigger has to come from African side; from the Indian side there doesn’t seem to be much of a trigger,” said Deven Choksey, managing director of investment broker KR Choksey. “I think they will start generating more subscribers [in Africa] and then will get more volume going forward which has resulted in higher amount of operating surplus even after investing in Africa.”

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