NEW DELHI: The ongoing tariff war among mobile operators in India over the past three months, which has had a major impact on both the profits and revenues of the telecom sector, has resulted in Bharti Airtel being replaced by Indonesia’s Telkomsel as the largest contributor to Singapore Telecommunications’ (SingTel) profits for the first time in at least eight quarters.

These figures were released on Wednesday, a day before the Singapore communications major is due to invest Rs 240 crore as part of a Rs 3,000-crore, three-installment investment that will see its holding in the Indian company rise by 1.52% over the next 18 months.

SingTel is Bharti Airtlel’s single-largest shareholder, which directly and through holding company Bharti Telecom holds about 30.5% in the company. It was actively involved in Bharti’s bid to forge a partnership with South African telco MTN and was slated to part-fund the deal by investing $3-4 billion in the company, though there is no official confirmation of these figures.

Analysts, however, are confident that Bharti Airtel would continue to remain a top player that contributes to SingTel’s bottom line.

India is extremely important to SingTel and the proof is that it is increasing its stake in Bharti. The fact that Bharti’s profits may be under pressure for a quarter or two does not dilute its importance in the SingTel portfolio,” said Jigar Shah, who heads research for the Indian operations of Singapore-based KIM ENG Securities.

The Singapore-based communications major holds significant stakes in six telecom companies—Bharti Airtel, Telkomsel, Thailand’s Advanced Info Service, Pakistan’s Warid Telecom, the Philippines’ Globe Telecom and Pacific Bangladesh Telecom. So far, the Indian operator was the largest contributor to SingTel’s kitty.

In addition to being edged out by Telkomsel, Bharti’s contribution to SingTel’s profits has also come down on a sequential basis. For the quarter ended September ‘09, Bharti’s contribution to SingTel’s bottom line was S$236 million compared with S$272 million in the previous quarter (June ‘09). Telkomsel’s contribution increased to S$252 million in September ‘09 against S$245 million in June ‘09.

Ironically, Bharti’s share towards SingTel’s profits has come down despite the Indian telco adding twice the number of customers as that of Telkomsel during the last quarter.

At the same time, a fourth of SingTel’s profits for the quarter ended September ‘09 has come from India. Again, on a year-on-year basis, Bharti’s contribution to SingTel’s profits was up by a little over 26%.

‘The fact that Telkomsel has contributed more this quarter has to be seen in context. In the long run, India offers far more growth potential, its market size is far greater than Indonesia’s, and margins here may be much higher. When you look at the relevance of the Indian market, a single quarter’s figures are irrelevant,” added Mr Shah.