Reliance Comm posts 4% dip in revenue and 37% fall in profit in Q1

Reliance Communications, a telecom operator in India, has posted a 4.3 percent fall in consolidated revenue at Rs 4,849 crore in the first quarter of fiscal 2011-12 as against Rs
5,069 crore in the corresponding quarte
r in FY 2011.

The company’s net profit nosedived 37.2 percent to Rs 157 crore during the first quarter ended June 30, 2011 from Rs 250 crore in the first quarter of previous fiscal.

EBITDA for the quarter stood at Rs 1,602 crore, with the EBITDA margin at 32.4 percent, amongst the highest in the industry, thanks to strong contribution from wireless and GEBU business.

Wireless revenue for the first quarter stood at Rs 4,327 crore as compared with Rs 4,153 crore in the comparable quarter in 2010. Global enterprise business decreased to Rs 2,292
crore from Rs 2,490 crore in the first quarter of 2010.

Recently, Reliance Communications announced the appointment of senior executives to strengthen Global business. The company has also reorganized its business
operations during the previous quarter and combined Global and Enterprise
Business as a single operating business unit.

Wireless minutes of usage increased to 97.3 billion, while revenue per minute stood at 0.44 paise/min. The global enterprise business unit (GEBU) EBITDA made up 35 percent of the
consolidated EBITDA, standing at Rs 560.7 crore for the quarter.

While Reliance Communications’ broadband figures for the last quarter saw a q-o-q net increase of 12.8 percent, this quarter’s broadband figures are likely to see a substantial
increase as well.

This may be due to the fact that the telecom operator has been on a broadband rate slashing spree, with rates for its broadband Net Connect data card most recently being slashed to Rs 1099, with unlimited data usage at a tariff of Rs 169 for prepaid users,
across the country in April.

The company also announced that price of the dongle will be reduced from Rs 1599 to Rs 1299 for the USB dongle/data card in Tamil Nadu and the first recharge (FRC) from Rs 330 to Rs 100. Customer price including the first recharge has come down from Rs 1929 to
Rs 1399, in that state. In a similar way, Netconnect 1x customer MOP has also
dropped to Rs 999. This is part of the company’s strategy to encourage EVDO
data usage in the country.

RCom has been one of the biggest losers in MNP. However, the company is growing its 3G subscriber base, which currentlystands at 2 million. RCom’s overall customer base at present stands at 143
million, which is up 5.6 percent, against 136 million in the last quarter.

Recently, RCom became the first operator in the country to introduce a 3G-enabled tablet in the country, with the lowest price point yet of Rs 12,999.

RCom also tied up with Apple
recently for 3G data plans for the Apple iPad 2 in India – the only private
operator in the country to offer these services exclusively. It looks like the
recent expansions to Reliance Communications enterprise, wireless and global division has proved beneficial to the troubled operator, and may help it recover from its debt burden soon.


By Beryl M
[email protected]