India Bharti Chairman: This Fiscal Year Capex Likely $1.8 Billion-$2 Billion

NEW DELHI (Dow Jones)--India's Bharti Tele-Ventures is likely to spend US$1.8 billion to US$2 billion in the fiscal year ending March 31, 2007 to expand its networks in the country, its chairman and managing director said.

"We should be increasing our presence to 5,200... towns this year from nearly 3,800 towns where we are present currently," Sunil Bharti Mittal told a news conference.

Bharti, India's largest mobile phone operator, had nearly 21 million customers at the end of March. The figure included 19.58 million GSM subscribers; the rest was made up of fixed-line and broadband users.

Bharti's joint managing director, Akhil Gupta, said the bulk of the capital expenditure in the current fiscal year will come from cash that it will generate.

"Our profits are growing. We may borrow a little for expenditure," said Gupta, adding that the company has an extended payment schedule for its network equipment vendors.

Gupta said that he expects the company's operating profit margin in the current fiscal year to remain at the same level as last year.

In the last fiscal year, Bharti had an operating margin of 37.4%.

Mittal said Bharti will aim to increase its market share in the current fiscal year.

Bharti, which is 30.84% owned by Singapore Telecommunications and 10% by Vodafone Group, had a market share of 21.8% in the domestic mobile phone market.

Mittal said Bharti will introduce 3G, or third-generation, mobile phone services in the current fiscal year if the government allows local operators to do so.

The government is expected to soon make a decision on allowing local mobile phone operators to offer 3G services, which the companies have been seeking to do. 3G provides faster Internet connections, video-conferencing and TV streaming.

Asked whether the company will pay a dividend in the current fiscal year, Mittal said Bharti Tele-Ventures will currently use most of the cash generated for expanding its operations.

Mittal, who is also the chairman of Bharti Enterprises, said the diversified conglomerate has held talks with global retailers Wal-Mart Stores, Britain's Tesco and France's Carrefour to enter the domestic retail sector.

Bharti Enterprises is the holding company of Bharti Tele-Ventures.

Mittal said the retail plan, including finalizing an overseas partner, will be ready in around two months.

Last week, Mittal said Bharti Enterprises will set up a separate company for its entry into the retail sector. "Initially, fruits and vegetables will be our main thrust," he said.

In 2004, Bharti Enterprises formed a joint venture with a firm backed by U.K.'s Rothschild family to export fresh fruits and vegetables from India to western markets.

-By Santanu Choudhury, Dow Jones Newswires; 91-11-23074020; santanu.choudhury@dowjones.com

-Edited by Marissa Chew

(END) Dow Jones Newswires"

Posted to the site on 28th April 2006