SINGAPORE (Apr 20): Singtel shareholders may be worried about the entry of TPG Telecom later this year. But they should pay just as much attention to the stiff telco battle taking place in India.

Singtel’s 39.5% associate Bharti Airtel is expected to report its first quarterly loss in 15 years, after a two-year-long brutal price war. Analysts say Airtel, majority-owned by billionaire Sunil Bharti Mittal, may also report a net loss in the quarter ended March of between INR58.5 crore and INR377 crore ($11.7 million and $79 million).

Airtel’s contribution to Singtel’s pre-tax earnings has fallen in the last two financial years. The company was once the second-largest contributor among Singtel’s associates, behind Indonesia’s Telkomsel. It is now the second-smallest contributor.

Airtel contributed pre-tax earnings of $224 million in the nine months to December, compared with $490 million in the same period a year earlier. Dividend contributions from Airtel fell from $17 million to $13 million over the same period.

Shares in Singtel are already down 5% this year, closing at $3.41 on April 18, as the market worries about the impact of intensifying competition in Singapore. Are investors adequately pricing in the impact of competition in India too?

Find out more in this week’s issue of The Edge Singapore (Issue 827, week of Apr 23), available at newsstands now.

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