Singapore's telecom major SingTel, which holds 32.3% stake in Bharti Airtel, today posted 9.6% decline in net profit to 902 million Singapore dollar for the October-December quarter.
The company has posted a net profit of SGD 998 million for the same period a year ago.
Singtel attributed the decline to high customers acquisition cost and 3G losses from Bharti Airtel in India.
"The strong gain in mobile customers in Singapore during the quarter led to higher acquisition and retention costs, while contributions from the regional mobile associates declined due to their weaker currencies and 3G losses from Bharti India," SingTel said in a statement.
It added that the group recorded higher net finance expense, reflecting its financing strategy of extending debt maturity with long-term borrowings, and higher taxes from Bharti.
"Consequently, net profit declined 10% to SGD 902 million," SingTel said.
Airtel South Asia reported strong revenue growth of 12%, reflecting tariff revision amid a more stable competitive environment in India. However, overall earnings were affected by Airtel’s 3G rollout costs, licence fees amortisation and higher finance charges, the statement said.
SingTel reported 2.7% increase in its group revenue at SGD 4,830 million during the quarter compared to SGD 4,704 million its posted for the same period in last financial year.
The growth in group revenue of the company was driven by its associate company in Singapore and Australia.
"This quarter, the Group recorded healthy growth with Singapore and Australia continuing to add mobile customers. Across their markets, our regional mobile associates have executed well against competition," SingTel Group CEO Chua Sock Koong said.
Last week, Bharti Airtel had reported 22% decline in consolidated net profit to Rs 1,011 crore for the October-December quarter due to higher interest outgo and costs related to the roll-out of 3G network.
This was the eighth straight quarter for which Bharti Airtel has reported a decline in net profit.
