Still, regulatory uncertainty clouds the outlook for the industry, as does the expected launch later this year of 4G services by conglomerate Reliance Industries
Ltd, which would mean a new rival with serious financial clout.
Bharti, the world's fourth-biggest cellular carrier by customers, posted a worse-than-expected 50 percent year-on-year drop in net profit to 5.09 billion rupees for its fiscal fourth quarter to end-March, capping a third straight year of declining profit for the New Delhi-based company.
Analysts had expected the firm, controlled by billionaire Sunil Mittal, to report net profit of 7.41 billion rupees, according to Thomson Reuters I/B/E/S.
For the full year ended March, Bharti made 22.76 billion rupees, its smallest annual profit in seven years.
Bharti shares fell about 5 percent soon after the results were released, before recovering into positive territory.
"The fact is that pricing is becoming more stable, that's a positive going forward," Gopal Vittal, Bharti's India chief executive, told reporters on Thursday.
While earnings were hit by higher interest costs and a tax charge as well as continued losses in its Africa operations, several operating indicators showed improvement.
Average revenue per user (ARPU) in its core India operation was 193 rupees during the quarter, up 4 percent from the prior three months, while total volume of minutes sold grew 5 percent.
Market share gains along with the cull of competitors may embolden the big operators to cut discounts further and even raise voice call prices in a market that has not seen any meaningful price increases since a bruising price war in 2009.
Bharti Airtel and Idea Cellular raised call prices in January by withdrawing discounts.
"There is a lot of room for cutting the discounting offers. Under-the-line price hikes will continue to happen," said Karan Mittal, an analyst with ICICI Direct in Mumbai.
Carriers, however, face several regulatory challenges, including a government demand to pay billions of dollars in surcharges for their existing airwaves.
India has also imposed penalties on Bharti, Idea and Vodafone, saying they entered into "illegal" roaming pacts with one another to provide 3G data services.
"Competition is the least of the headaches for this sector. Now it is regulation that's an issue," said Phani Sekhar, a fund manager at Angel Broking, which sold its Bharti stock last year.
Bharti, nearly one-third owned by Southeast Asia's top phone carrier Singapore Telecommunications Ltd, said revenue for the March quarter rose 9.2 percent to 204.48 billion rupees, lagging estimates marginally. Operating margin improved to 31.7 percent from 30.6 pct in previous quarter.
The results came after a strong performance by Idea Cellular, which last week reported its fourth straight quarter of earnings growth.
Bharti, which ventured into Africa in 2010 with a $9 billion acquisition of mobile phone operations in 15 countries, has yet to turn a profit there. Africa ARPU in the quarter was $5.9, down 5 percent sequentially, and Bharti said it expects cash flow in Africa to improve as capital expenditure declines.
Bharti, which operates in 20 countries in Asia and Africa, plans to spend up to $2.3 billion this fiscal year on its networks, including about $600 million in Africa.
It also said on Thursday it would buy the remaining 30 percent stake in its Bangladeshi unit from Warid Group for an undisclosed amount, and would continue to acquire minority investor stakes in the overseas units it does not fully own.
In March, the company raised its stake in its Nigerian unit.