India Update: Reliance, Bharti Fill Their Coffers

Bharti Airtel Ltd. (Mumbai: BHARTIARTL) and Reliance Communications Ltd. both reported significant increases in revenues and profits for the three months to the end of September as their mobile subscriber bases continued to grow at a frightening pace.

Reliance reported revenues of 56.45 billion Rupees (US$1.16 billion), up 23.3 percent compared with a year earlier, and net income of R15.3 billion ($315 million), an increase of 17.3 percent.

And with demand for new mobile connections unrelenting, Reliance, which operates CDMA and GSM mobile networks, is investing heavily in its infrastructure. In the three months to September 30, the carrier, which is also expanding its international infrastructure, reported capital expenditure of R47.7 billion ($984 million). (See Reliance Wants the World, Reliance Borrows $750M for Huawei Gear, and Yipes! Here Comes a Spending Spree.)

Reliance ended September with just over 56 million mobile subscribers, having added 1.76 million during the month. Collectively, India's wireless carriers added 10.07 million new lines during September, taking the total to 315.3 million.

Bharti, meanwhile, reported a 42 percent increase in revenues to R90 billion ($1.86 billion) in the quarter (the second of its fiscal year), while its net income rose by 27 percent to R20.46 billion ($422 million). Bharti ended September with 77.5 million mobile subscribers, having added 2.7 million new customers during the month. (See Bharti Airtel Reports Q2.)

Bharti, which today announced a new corporate brand and some new telecom training centers, is India's biggest mobile operator, ahead of Reliance and Vodafone Essar , which has 54.6 million mobile customers. (See Bharti Rebrands.)

Will Turkcell follow Telenor and Etisalat?
With India's mobile market set to more than double in the next four years, more overseas carriers are looking to buy a piece of the action. (See A Guide to India's Telecom Operators.)

With Telenor ASA (Nasdaq: TELN) having just committed $1 billion to take a 60 percent stake in Indian mobile newcomer Unitech Wireless, and United Arab Emirates carrier Etisalat having taken a 45 percent stake in another of the newly licensed mobile players, Swan Telecom, for $900 million in September, another ambitious operator with international aspirations, Turkcell Iletisim Hizmetleri A.S. (NYSE: TKC), might follow the Scandinavian giant's lead. (See Telenor Takes Mobile Stake in India and Etisalat Buys Into India.)

Responding to questions about whether Turkcell plans to buy a majority stake in new mobile license holder Datacom Solutions, a $2.2 billion move mooted by the Indian business press late last week, CEO Sureyya Ciliv told Reuters that Datacom was one of a number of overseas investments under scrutiny.

Turkcell's involvement appears to be dependent on whether the current owners of Datacom Solutions, Videocon Group (64 percent) and Jumbo Techno Services (a vehicle of the Nahata family that owns the other 36 percent), can sort out their differences: The ongoing strategic tussle has already lead to the recent resignation of Datacom's CEO Ravi Sharma, who has been replaced, according to reports, by Raj Kumar Dhoot, a member of the family that owns Videocon.

Ceragon, Subex Land Deals
Wireless backhaul equipment specialist Ceragon Networks Ltd. (Nasdaq: CRNT) has bagged a multimillion dollar deal with CDMA network operator Tata Teleservices Ltd. , which will deploy the vendor's multiservice (TDM and Ethernet) microwave backhaul gear. (See Ceragon Wins Tata Deal.)

Tata, which has 29.3 million mobile subscribers, says the resulting boost to its backhaul capacity will enable it to launch a broad range of data and multimedia services in addition to its current voice offerings.

Elsewhere, GSM operator Aircel Ltd. is to deploy a nationwide revenue assurance and fraud management system from Subex Ltd. Aircel's long time services partner Wipro Ltd. (NYSE: WIT) will deploy and integrate Subex's business software. (See Aircel Chooses Subex OSS.)

— Ray Le Maistre, International News Editor, Light Reading