News From Telecom World

RCom net profit soars to Rs 1,531 cr, subscriber base reaches to 56Mn (India)

Posted on: November 3, 2008

Reliance Communications (RCom) pound the market forecasts, reports a 17.3% rise in consolidated net profit for the second quarter ended September 30, 2008. Its net profit grows to Rs 1,531 crore as against Rs 1,305 crore in the year-ago period. RCom adds 5.3 million new mobile subscribers and totals its subscriber base to 56 million (as against Bharti’s almost 80 million subscribers), of which 47 million are CDMA subscribers and the rest GSM. Rcom earned revenues of Rs 5,645 crore, up 23.3% in comparison to Rs 4,579 crore in the same quarter last year.

In this quarter, RCom’s ARPU drop from Rs 282 to Rs 270 this quarter. This slump in blended ARPU led to an increase in the minutes of usage (MOU) per user per month for the company to stand at 423 , while the average revenue per minute during the quarter was 64 paise. For now its EBITDA ascended by more than 17 per cent to Rs 2,302 crore.

Chairman of Reliance Communications, Anil Ambani said, “We have seen significant coverage expansion especially in rural areas, which required significant capex. However going forward we see an extensive decline in capex.”

The company said, it has maintained a healthy balancesheet with net debt-to-equity ratio at a conservative level of 0.54:1 despite a capex spend of Rs 4,773 crore. The company is also looking forward to earn 2 per cent benefit that it will earn from the universal service obligation (USO) fund as it plans to launch its GSM services by the year-end. According to S P Shukla, President, Wireless Business, Reliance Communications, “The 2-per-cent discount that we get for expanding in areas beyond the metros are bound to help our margins.”

“We plan to launch our GSM services in some major cities by the year-end, while the pan-India rollout will take place by the middle of next year,” added Ambani. “We will maintain our margins at the current levels and maintain our growth,” he said.

Source: Wireless Federation

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