(Bloomberg) -- Bharti Airtel Ltd. reported a lower-than-expected quarterly profit as gains from tariff hikes failed to offset the drag from a one-time charges due to foreign exchange losses.

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India’s No.2 wireless carrier, led by billionaire Sunil Mittal, almost trebled its net income to 35.9 billion rupees ($427 million) for the quarter ended Sep. 30 from the same period last year, according to a filing Monday. It still fell short of the average 43.98 billion-rupee profit estimated by analysts surveyed by Bloomberg.

The operator took a one-time expense of 8.54 billion rupees for the quarter on account of net foreign exchange loss due to currency devaluation in group units. Revenue rose 12% to 414.73 billion rupees, beating estimates slightly. Total costs also climbed 12% to 196.3 billion rupees, the filing said.

The average revenue per user, or ARPU, for India operations was 233 rupees, a jump of 10% from the preceding quarter. It’s a far cry from the 300-rupee mark that Bharti has been flagging for a while as the minimum needed for financial stability of the telecom operators.

The latest quarterly earnings are coming on a low base. Last year’s September quarter profit was also hit by a one-off expense due to an adverse court ruling in India and forex losses due to a devalued Nigerian naira.

“The flow through of tariff repair is in-line with our expectation on ARPU increase and SIM consolidation. We reported industry leading ARPU,” Managing Director Gopal Vittal said in the filing, without commenting specifically on the forex-related charges this quarter.

Vittal has been appointed as Bharti’s vice chairman while Shashwat Sharma was named as the managing director and chief executive officer, according to a company filing. Both will move into their new roles starting Jan. 1, 2026.

Key Insights

• The tepid performance outlines continuing foreign exchange related risks for the wireless carrier even though the it benefited from higher tariffs that kicked in from early July.

  • The charges for users were raised in tandem with sector leader Reliance Jio Infocomm Ltd. and smaller rival, Vodafone Idea Ltd. in India’s oligopolistic market with only three private sector wireless operators.

• While the ARPU rose, Bharti’s user base in India shrunk by 0.7% to 406.5 million users compared with the preceding quarter. Reliance Jio reported a user base of 478.8 million and an ARPU of 195.1 rupees for the September quarter.

• Africa mobile services revenue fell 1.2% from last year to 101.6 billion rupees showing some lingering pain. Bharti’s earnings have repeatedly taken a hit after the naira was devalued in June 2023 as Nigeria sought to remove currency controls that were distorting its economy.

  • Airtel Africa’s organic top-line growth may reach the high teens in fiscal 2025 and beyond, following a 21% gain in 2024, Bloomberg Intelligence Analyst John Davies wrote in an Oct. 25 note. A free-floating Nigerian naira will probably provide long-term support, reduce uncertainty and ease cross-border transactions, Davies wrote.

• A battle of billionaires is looming as Elon Musk-controlled Starlink’s plans to roll out satellite broadband internet in India. Reliance Jio and Bharti are wary of Starlink securing cheap spectrum and undercutting their terrestrial wireless phone networks.

• Brokerage HSBC raised price target and upgraded Bharti’s shares this month to buy, citing home broadband as the “next big growth opportunity for telecom operators” with a potential market size of $7 billion.

• Bharti said on Sep. 30 that it has prepaid $1 billion to India’s telecom department for spectrum acquired in 2016, in a bid to clear high cost deferred liabilities. Indus Towers Ltd. became a unit of Bharti during the quarter after the latter’s stake went past 50% after a share buyback.