India's top mobile phone carrier Bharti Airtel on Friday reported a bigger-than-expected 38 percent fall in fiscal second-quarter profit, its seventh straight quarterly profit drop, hit by higher interest costs and foreign exchange losses.

Bharti, nearly a third owned by Southeast Asia's biggest phone firm SingTel, said consolidated net profit fell to 10.27 billion rupees ($210 million) for its fiscal second quarter ended September from 16.61 billion rupees a year earlier, based on international accounting standards.

Bharti, which operates in 19 countries across Asia and Africa, is the world's fifth-biggest mobile phone carrier by subscribers. India is the company's biggest market where it had about 173 million mobile users at the end of September.

Bharti last year ventured into Africa by acquiring most of the African mobile operations of Kuwait's Zain in a $9 billion debt-funded deal and became the world's fifth-biggest mobile carrier by subscribers.

But high costs in Africa have kept margins under pressure and it has yet to turn a profit there.

However, the outlook for India's mobile sector has improved after carriers including Bharti raised voice call prices in July by about a fifth, the first such increase in at least two years in the ferociously competitive market after a vicious price war had sent call prices tumbling and squeezed profits.

Bharti and its rivals in the world's second-biggest mobile phone market of about 870 million users are also betting on a pick up of premium third-generation (3G) mobile data services after they launched high-speed networks this year.

India has achieved double-digit growth fueled by non voice businesses. The arrest of continuously declining prices in India augurs well for the telecom industry, Bharti Chairman Sunil Mittal said in a statement.



A Reuters poll of brokerages had expected net profit of 12.33 billion rupees on revenue of 172.58 billion rupees for the New Delhi-based firm, which had 227 million mobile users at the end of September in 19 countries across Asia and Africa.

Bharti, which last year acquired mobile operations in 15 African countries in a $9 billion debt-funded deal, said consolidated revenue rose to 172.76 billion rupees from 152.31 billion in the year-ago quarter.

The net profit was hurt by higher interest expenses that trebled from a year earlier to 11.18 billion rupees for the September quarter.

Currency fluctuations led to foreign exchange losses of 2.39 billion rupees for the quarter versus profit of 2.49 billion rupees in the year ago quarter.

Bharti also took on debt to pay more than $3 billion for 3G and broadband spectrum in a state auction last year.

Monthly average revenue per user (ARPU), a key metric for telecom carriers, from Bharti's Indian operations fell an annual 9 percent to 183 rupees for the quarter, while Africa ARPU fell 1 percent to $7.3.

Shares in Bharti were trading up 0.9 percent at 396.75 rupees in a firm Mumbai market. The stock, valued at $30.4 billion, are up 9.6 percent this year, outperforming a nearly 14 percent fall in the broader market.

($1=49 Indian rupees)