January 15, 2013 / 1:02 PM / 6 years ago

Bharti Airtel replaces India CEO in management shake-up

NEW DELHI (Reuters) - Indian mobile phone company Bharti Airtel Ltd is replacing the chief executive of its key domestic operations as the group seeks to reverse a trend of declining profits.

The world’s fourth-biggest mobile phone carrier by customers has struggled to grow amid tough competition in its home market, which accounts for about 70 percent of its revenue. The Indian mobile market leader, which also operates in Africa, had posted 11 straight quarters of declining profit in September.

Sanjay Kapoor, a 15-year veteran of the company, will be replaced by group director of special projects Gopal Vittal as chief executive of India operations from March 1, the group controlled by billionaire Sunil Mittal said on Tuesday.

Vittal, who rejoined Bharti last year after a stint with India’s largest consumer goods maker Hindustan Unilever Ltd, will focus on increasing market share and margins and also on growing alternate revenue streams such as 3G data and mobile money, Bharti said.

Bharti Airtel shares jumped in afternoon trade ahead of the news, with traders attributing the surge to a likely sector-wide increase in voice call tariffs. The stock closed 5 percent higher, while rival Idea Cellular climbed 8.4 percent.

Bharti and its rivals in India launched high-speed 3G mobile data services in early 2011 after spending billions of dollars to buy airwaves. The premium services, however, have achieved slower than expected growth.

Indian mobile operators receive 85 percent of their revenue from voice calls but are increasingly trying to expand higher-margin data services.

“Until now it has only been about voice. Now it will be about data, video calling, so many other applications pertaining to data,” said a Mumbai-based telecoms analyst who declined to be named.

Vittal, with his consumer goods background, is well-placed to drive the change, the analyst added.

Kapoor, who was Bharti’s head of India and South Asia, will remain on the board of the group’s telecoms tower joint venture Indus Towers. He was not immediately available for comment on Tuesday.

Apart from India, Bharti operates in Sri Lanka and Bangladesh in South Asia and 17 countries in Africa. The company’s Bangladesh and Sri Lanka operations will become part of Bharti’s international unit, currently headed by Manoj Kohli.

Editing by David Goodman

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