Reliance Communications is planning to focus on 3G and REV-B network expansion with a Capex (capital spending) of nearly Rs 2,000 crore during fiscal 2015.
The Anil Ambani-promoted Reliance Communications invested around Rs 1,500 crore during fiscal 2014. Rs 2,000 crore is one of the poor Capex plans for an operator with around 37.4 million plus mobile data subscriber base.
Reliance Communications is following Capex Lite strategy. This means, it will not increase its Capex substantially.
Vinod Sawhny, CEO of Reliance Communications, during a recent analyst meet, said: “We will bolster our network. This could be through ICR arrangements. We will add REV-B onto our CDMA network, and our focus will be on enhancing network experience of our customers and we would be spending our Capex in that area.”
Reliance Communications Rev B plans
Reliance Communications, which is one of the leading 3G service providers, has already identified some premium telecom markets for expanding its Revision B network. Rev B offers over a 14.7 MBps on 800 MHz spectrum which is equal to or better than in-wall experience than 3G at 2100 MHz band said Reliance Communications.
The company is trying to cash in on the upcoming Rev B oriented devices. It will focus on unveiling GSM + CDMA smartphones in the market and strengthening its CDMA team within mobility business to improve voice revenue, which is a worry for Reliance Communications.
By end of fourth quarter of fiscal 2014, Reliance Communications added 10,000 sites under its ICR agreements to enhance coverage and improve the quality of service. These ICR arrangements, which are based on “Pay as you use” model having tenure of about 24 months, will help the company to accrue revenue without investments.
Reliance Communications’ India business earned fourth quarter revenue of Rs 4,649 crore. Voice ARPU has increased 2.1 percent to Rs 98 from Rs. 96 in Q3 FY14.
Reliance Communications’ 3G site utilization fairly high
The company serves 37.4 million wireless data customers. Its 3G customer base rose 16.2 percent q-o-q to 12.9 million. 34 percent of mobile Internet users on the RCOM network are 3G users. Total data usage grew 20.5 percent to 50,251 million MBs. Data usage per sub is 455 MB.
Telecom analysts say Reliance Communications’ 3G customer base per 3G site seems fairly high, indicating a possible poor quality of service to its mobile data customers. Around 20-40 percent is the utilization of 3G site of RComm.
Gurdeep Singh, CEO of wireless business at Reliance Communications, said: “Our data utilization per site also varies from a city to city and it is in the ballpark of 20-34 percent, depending on the city and the market.”