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Bharti airtel continue loosing money in Africa.
Rank: Elder Joined: 10/13/2009 Posts: 1,950 Location: in kenya
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Quote:
* Net profit 14 bln rupees vs 16.32 bln market forecast
* Net sales 162.65 bln rupees vs 163.28 bln market forecast
* Africa-related loss 4.2 bln rupees in qtr, sees better margins
* Shares fall more than 4 percent after quarterly earnings (Adds comments from management and analysts)
Bharti, 32.3-percent owned by Southeast Asia's biggest phone firm SingTel , said consolidated net profit fell to 14 billion rupees ($314 million) for its fiscal fourth quarter ended March from 20.44 billion a year earlier.
Net sales in the quarter rose to 162.65 billion rupees from 107.49 billion. The profit was weighed down by interest expense of 6.83 billion rupees in the quarter.
A Reuters poll of 10 brokerages had on average expected net profit of 16.32 billion rupees on revenue of 163.28 billion rupees for the New Delhi-based firm that now operates in 19 countries across Asia and Africa.
Bharti posted a 12 percent drop in average revenue per user per month, a key gauge for profitability, in the March quarter to 194 rupees ($4.3), while average usage per user per month for the quarter fell 4 percent from a year ago to 449 minutes.
Average revenue per user in Africa dropped 3 percent from the previous quarter to $7.20.
Bharti has earmarked as much as $3.1 billion in capital expenditure for its India, Africa, South Asia and tower business for this fiscal year, said Manik Jhangiani, group CFO at the mobile operator's parent Bharti Enterprises.
excerpt from http://af.reuters.com/ar...3E7G40KL20110505?sp=true'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
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Rank: Elder Joined: 7/22/2009 Posts: 7,452
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Even mama mboga will tell you that if you buy a cabbage at 20/= and sell it at 15/= you'll definitely make a loss! This fellows at one point were charging across the networks phone calls and smses at a lower price than the interconnection charge. Now they are paying for you to hama, give you discounts and now if you sms numbers of your friends to a certain number and they hama, they will be calling you for free for a month - before they decide to hama back to where they came from. I can buy a safcom line, get everyone who knows me and has an airtel line to sms my number to that number of theirs, "hama" for free, make free phone calls to my friends for a whole month then throw away the line! How about that? Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 2/7/2007 Posts: 11,935 Location: Nairobi
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Loss or no loss,why would i care?.....Sio Kampuni ya mama yangu and neither am i a shareholder.C'Mon,let them bring down the cost of calling to Zero!! Nothing great was ever achieved without enthusiasm.
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Rank: Member Joined: 1/1/2010 Posts: 511 Location: kandara, Murang'a
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Njung'e wrote:Loss or no loss,why would i care?.....Sio Kampuni ya mama yangu and neither am i a shareholder.C'Mon,let them bring down the cost of calling to Zero!! LMSAO! Na Hague pia si kwa mama yao! Foresight..
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Rank: Member Joined: 6/21/2010 Posts: 514 Location: Nairobi
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31% drop in earnings for the first qtr! Its just a matter of time before shareholders start complaining about their wealth erosion and i think everyone knows what happens next. Came to learn that Airtel's strategy is to remain as lean as possible coz: 1.IT function outsourced to IBM. 2. Call center basically the customer care function outsourced. 3. Base stations maintenance outsourced. 4. Planning to sell their current debt. 5. Planning to outsource their billing process. Basically they'll remain with sales inhouse. 'They say money cannot buy me happiness but when i compare when i had none and now, i'm happier' Kevin O'leary
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Rank: Veteran Joined: 12/4/2009 Posts: 1,982 Location: matano manne
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MaichBlack wrote:Even mama mboga will tell you that if you buy a cabbage at 20/= and sell it at 15/= you'll definitely make a loss!
This fellows at one point were charging across the networks phone calls and smses at a lower price than the interconnection charge. Now they are paying for you to hama, give you discounts and now if you sms numbers of your friends to a certain number and they hama, they will be calling you for free for a month - before they decide to hama back to where they came from.
I can buy a safcom line, get everyone who knows me and has an airtel line to sms my number to that number of theirs, "hama" for free, make free phone calls to my friends for a whole month then throw away the line! How about that? . @Maich... I've done that already. Just buy a new Safcom line, take it to the ....kuhama and pronto!
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Rank: Elder Joined: 9/7/2010 Posts: 2,148 Location: elderville
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Rahatupu wrote:MaichBlack wrote:Even mama mboga will tell you that if you buy a cabbage at 20/= and sell it at 15/= you'll definitely make a loss!
This fellows at one point were charging across the networks phone calls and smses at a lower price than the interconnection charge. Now they are paying for you to hama, give you discounts and now if you sms numbers of your friends to a certain number and they hama, they will be calling you for free for a month - before they decide to hama back to where they came from.
I can buy a safcom line, get everyone who knows me and has an airtel line to sms my number to that number of theirs, "hama" for free, make free phone calls to my friends for a whole month then throw away the line! How about that? . @Maich... I've done that already. Just buy a new Safcom line, take it to the ....kuhama and pronto! Already calling Airtel numbers for 1 bob a minute. So find it too much work to do just to call people for free. He who can express in words the ardour of his love, has but little love to express. - Petrach, Son. (That men by various ways arrive at the same end. - Montaigne, The Essays of.)
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Rank: Veteran Joined: 5/31/2008 Posts: 1,076
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A lot of the time I have found their decisions not to make much economic sense to me. It was said said that they didnt mind making losses here as their financial base was cushioned by the mother Co. in India. Now that the Co in India is beginning to feel the heat - they may need to price themselves in a way that makes ecomic sense read upward adjustment of service tarrifs! Dunia ni msongamano..
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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Okay so I looked critically at this Bharti results, even the results presentation made by their management.
I have to agree their investment in Africa, though challenging made sense, because by Jove, India is a tough as nails market. But they have to use the match time, soon it will be injury time.
Look at the rationale, people make much more in Africa and the room for growth is wide...
INDIA
Mobile penetration: 66%
Av. no of competitors: 10-12
Business model: high usage, low price
Minutes of use: ~449
Revenue per user: ~$4
Revenue per min: ~1c
AFRICA
Mobile penetration: 40%
Av. no of competitors: 3-5
Business model: low usage, high price
Minutes of use: ~120
Revenue per user: ~$7
Revenue per min: ~6c
Success is a habit. Vodafone Essar leads in number portability race in India and has beaten down Bharti's tracks to stand at close no 2 in revenue for India, despite being no 3 in no of subscribers.
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Rank: New-farer Joined: 11/18/2010 Posts: 8
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muganda wrote:Okay so I looked critically at this Bharti results, even the results presentation made by their management.
I have to agree their investment in Africa, though challenging made sense, because by Jove, India is a tough as nails market. But they have to use the match time, soon it will be injury time.
Look at the rationale, people make much more in Africa and the room for growth is wide...
INDIA
Mobile penetration: 66%
Av. no of competitors: 10-12
Business model: high usage, low price
Minutes of use: ~449
Revenue per user: ~$4
Revenue per min: ~1c
AFRICA
Mobile penetration: 40%
Av. no of competitors: 3-5
Business model: low usage, high price
Minutes of use: ~120
Revenue per user: ~$7
Revenue per min: ~6c
Success is a habit. Vodafone Essar leads in number portability race in India and has beaten down Bharti's tracks to stand at close no 2 in revenue for India, despite being no 3 in no of subscribers.
Thats correct assessment. Now lets forget about $ 10 billion loan. If you see excel file given in their website you will notice the following for its african operations. EBITDA / Total revenues MARCH 26.4% EBITDA / Total revenues DEC 20.8% ( due to series of price cut from sept to december & rebranding ) EBITDA / Total revenues sept 24.0% That shows airtel is improving in africa.
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Rank: Elder Joined: 7/21/2010 Posts: 6,183 Location: nairobi
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Kenya airtel will be the first to collapse. "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 11/7/2007 Posts: 2,182
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@ mlennya must be a safcom symphathiser LOVE WHAT YOU DO, DO WHAT YOU LOVE.
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Rank: Elder Joined: 12/9/2009 Posts: 6,592 Location: Nairobi
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So what do you guys think their turn-around strategy is because I cannot see one and we all know that they cannot continue this way for long.
BBI will solve it :)
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Rank: Chief Joined: 8/4/2010 Posts: 8,977
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2012 wrote:So what do you guys think their turn-around strategy is because I cannot see one and we all know that they cannot continue this way for long. I too wonder what will be the reverse of their kamikaze business strategy here in KE, which happens to be the HQ for Africa. In Zambia their delisting request has been rejected enough times. I want them to attempt this kamikaze strategy in Zambia while their shares are still trading in the Lusaka stock market... $15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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Rank: Veteran Joined: 7/5/2010 Posts: 2,061 Location: Nairobi
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How far is their 3G rollout? Weren't they supposed to launch an onslaught on the lucrative data market in April? We are now inching to mid-may na sijaskia kitu.
Somebody with insider info please update us.
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Rank: Member Joined: 6/11/2008 Posts: 257
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quicksand wrote:How far is their 3G rollout? Weren't they supposed to launch an onslaught on the lucrative data market in April? We are now inching to mid-may na sijaskia kitu.
Somebody with insider info please update us. 3G is very big challenge for Airtel. It was suppose to be out by Jan....then Feb...Then March...Then April.... I think it will take couple of years.... I want to be a millionaire.
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Rank: Member Joined: 3/5/2008 Posts: 532 Location: Nairobi
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B.Timer wrote:
A lot of the time I have found their decisions not to make much economic sense to me.
It was said said that they didnt mind making losses here as their financial base was cushioned by the mother Co. in India.
Now that the Co in India is beginning to feel the heat - they may need to price themselves in a way that makes ecomic sense read upward adjustment of service tarrifs!
@B.Timer, very well said. have said so here so many times.Business must be a viable venture, making profits, reinvesting in growth, infrastructure and working on a clear 10-20 year strategic road map. Those butt,,, sorry bharti guys operate like a suicidal guy hanging over the cliff ready to die. But even more stupid is the fact that they dont want to go over the cliff alone.They plan mass murder for the entire telecommunication industry.Kill the entire industry.sad.
Strive not to be a success, but rather to be of value. –Albert Einstein.
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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hisah wrote:2012 wrote:So what do you guys think their turn-around strategy is because I cannot see one and we all know that they cannot continue this way for long. I too wonder what will be the reverse of their kamikaze business strategy here in KE, which happens to be the HQ for Africa. In Zambia their delisting request has been rejected enough times. I want them to attempt this kamikaze strategy in Zambia while their shares are still trading in the Lusaka stock market... Hapa walipatikana. The delisting should be rejected more & more!
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Rank: Elder Joined: 10/13/2009 Posts: 1,950 Location: in kenya
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Bharti's problem is its centralized way of doing business I pity The Kenyan CEO in that he is left in an awkward situation where decisions have to be made by an executive in charge of africa b4 he can relay it in the local operation.Another thing due to over-outsourcing he might be unable to know what exactly is going on in the network. Case in point the Network crash that affected airtel system in india and lasted for several hrs, No explanation was given for that crash. Another dilemma is that airtel is playing catchup to its competitors, they are about to relaunch The airtel money a segment that safaricom has been operating for more than 4 yrs now, while their 3G network is yet to roll out.Given the challenges airtel is experiencing in the rollout of 3G in India we are yet to see more drama locally once they launch their 3G network. Its quite interesting to note that the reason airtel dropped the call premiums were to make inroads into the mass market, but as things stand the growth in the african operation is too negligible less than 2% while in Asia its over 12%. '......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
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Rank: Veteran Joined: 7/22/2008 Posts: 1,139
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Ata tukihama sisi wote hutewes saidia "You're not supposed to be so blind with patriotism that you can't face reality. Wrong is wrong, no matter who says it". Malcolm X
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