India and Africa mobile group Bharti Airtel saw its profit fall during its fiscal Q1, as the company was faced by regulatory and tax developments in India, and planned accelerated investments in India and Africa.

In a statement, Sunil Bharti Mittal, chairman and MD of the company, said: “Telecom revenues in India have been depressed due to hyper-competition and recent regulatory and tax developments… On the African side, we are gaining market share, benefiting from the significant investments made in the last two years.”

For the quarter to 30 June 2012, the company announced net income of INR7.62 billion (US$138.6 million), down by 37.3 percent from INR12.2 billion, on revenue of INR193.5 billion, up 14 percent from INR169.7 billion.

In a statement, it said that “stagnant EBITDA coupled with higher depreciation and amortisation arising from enhanced capex and licence fees has resulted in the lower [profit]”.

Mobile subscriber revenue in India during the period was impacted by two changes: Airtel said that guidelines from watchdog TRAI around processing fees restricted the sale of bundled tariffs; and a tax increase led to all telecom services becoming more expensive by 2 percent.

For its India and South Asia mobile business, EBIT was INR17 billion, down 18 percent from INR20.9 billion, on revenue of INR106.8 billion, up 9 percent from INR98.4 billion.

A high spot for India was a 44.2 percent increase in mobile data revenue. It noted that “data and value added services offer tremendous growth potential”.

According to the Economic Times, the board of Airtel is also considering the sale of up to 10 percent of its towers unit, Bharti Infratel. No timeline has been given for a decision.

In Africa, EBIT was US$62 million, up 23 percent from US$50 million, on revenue of US$1.1 billion, up 9 percent from US$979 million. The company noted challenges on the horizon, however, including “economic and currency headwinds” in key markets, as a result of the Eurozone crisis, lower aid and grants, rising inflation, and “political issues” in some countries.

As a result of this, it has intensified its market operations, advertising and network rollouts, as well as pursuing new growth initiatives with 3G, Airtel Money, and in the Rwandan market.

Overall it saw a 13 percent year-on-year growth in mobile subscribers to 250 million, driven by growth of 11 percent in India & South Asia (to 194.2 million) and 20.6 percent in Africa (to 55.9 million).