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‘One Percent per Quarter’ from RCom
TT Correspondent |  Mumbai |  02 Nov 2009

The so-called lucrative Indian mobile services sector may not actually stand up to this belief as Reliance Communications followed others in registering nominal growth for Q2 2009. In fact RCom’s financial performance was far behind compared to its fierce competitor Bharti Airtel.

RCom reported revenue of Rs 5,703 crore as compared to Rs 5,645 crore recorded in the corresponding quarter last year. The revenue is almost stagnant with a marginal 1 % increase. Net profit fell by 51.63 % to reach Rs 740.30 crore. RCom attributed the fall in profit due to provision of Rs 283 crore on account of forex, derivative and MTM losses. Otherwise, the company claims that its profit would have been Rs1,023 crore.

Revenues from wireless services were Rs1,736 crore, from global services Rs 679 crore, broadband Rs 252 crore.

The EBITDA also fell down drastically from Rs 2,302 crore to Rs 2020 crore.

ARPU fell down to Ra 161 from Rs 210 last year.

The only aspect which showed a northward trend was the growth in subscriber base from 60 million last year to 92 million by the end of September 30, 2009 at 53.3%.

“In the near term, the wireless sector in India is undergoing a challenging phase, with increased competitive intensity and continuing aggressive rebalancing of mobile tariffs by all leading players. We believe a forward-looking and conducive regulatory framework by TRAI and DOT, which is already under consideration, to facilitate market driven industry consolidation will be a strong enabler to protect and create long term value for all stakeholders,” said Chairman, Anil Ambani.

In an era of one paise per second tariff, one assumes the investors should be mentally prepared to accept the one percent per quarter growth achieved by operators.

    
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02 Nov 2009(IST)  
Comment
Gross subscriber figures are erroneous. Government must force operators to disclose active subscriber base instead of gross base, as the gap between gross and net is widening due to increased customers.
Posted By :- Samir Ghosh
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