Published on 4/30/2009 9:50:22 PM
A sharp decline in Average Revenue Per User (ARPU) and promotional offers that drove down tariffs to the lowest levels in the industry weighed on Reliance Communications (RCom) as it posted a a 3.3% fall in fourth-quarter consolidated net profit. Net profit fell to Rs 14.54 billion during the quarter from Rs 15.03 billion a year earlier. The company's revenue from its wireless business grew 2% quarter on quarter from Rs 44.11 billion to Rs 45.01 billion or 8% higher than the same quarter in the previous year.
Monthly ARPU dropped 11% from the previous quarter to Rs 221 during January-March quarter. Interestingly, despite a promotion offering free minutes of usage for 90 days, RCOM’s minutes of use per subscriber per month slipped to 372 minutes from 410 (Character emphasis mine).
RCOM added over 11.3 mn wireless subscribers during the quarter inlcuding 5 million that were added on its GSM network rolled out in January. During this period, India added close to 44 million mobile subscribers. At the end of March 2009, RCom had 72.6 million subscribers.
The company's capex stood at around Rs 190 billion, which was spent mainly on rolling out its GSM network. This was 35% lesser than previous estimates. Company chairman Anil Ambani attributed the lower capex to "very competitive cost". During the January-March quarter, the company added 5,000 telecom towers to its network, taking the total to 48,000 towers. Reliance is expected to spend 33% lesser than the earlier announced Rs. 300 billion capex in 2009-10 suggesting that the major part of its expansions are over and the operator's infrastructure has now stabilized at operational level. The company will now spend Rs. 100 billion excluding any 3G license related expenses.
A sharp decline in Average Revenue Per User (ARPU) and promotional offers that drove down tariffs to the lowest levels in the industry weighed on Reliance Communications (RCom) as it posted a a 3.3% fall in fourth-quarter consolidated net profit. Net profit fell to Rs 14.54 billion during the quarter from Rs 15.03 billion a year earlier. The company's revenue from its wireless business grew 2% quarter on quarter from Rs 44.11 billion to Rs 45.01 billion or 8% higher than the same quarter in the previous year.
Monthly ARPU dropped 11% from the previous quarter to Rs 221 during January-March quarter. Interestingly, despite a promotion offering free minutes of usage for 90 days, RCOM’s minutes of use per subscriber per month slipped to 372 minutes from 410 (Character emphasis mine).
RCOM added over 11.3 mn wireless subscribers during the quarter inlcuding 5 million that were added on its GSM network rolled out in January. During this period, India added close to 44 million mobile subscribers. At the end of March 2009, RCom had 72.6 million subscribers.
The company's capex stood at around Rs 190 billion, which was spent mainly on rolling out its GSM network. This was 35% lesser than previous estimates. Company chairman Anil Ambani attributed the lower capex to "very competitive cost". During the January-March quarter, the company added 5,000 telecom towers to its network, taking the total to 48,000 towers. Reliance is expected to spend 33% lesser than the earlier announced Rs. 300 billion capex in 2009-10 suggesting that the major part of its expansions are over and the operator's infrastructure has now stabilized at operational level. The company will now spend Rs. 100 billion excluding any 3G license related expenses.
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