Indian telecom service provider Reliance Communications has indicated lower Capex (capital spending) for fiscal 2014-15.

In the third quarter of FY 2013-14, its Capex was Rs 327 crore.

The Anil Ambani-promoted Reliance Communications will continue to follow the strategy of building revenues ahead of investments and de-risk the telecom business by deploying more sites through bi-lateral ICR arrangements and subsequently deploying own infrastructure on viable sites.

The strategy of Reliance Communications is different from Bharti Airtel that said it will invest around $2 billion as Capex during FY 2014-15 focusing on 3G and data networks. However, both Bharti Airtel and Reliance Communications are betting big on data services to enhance revenue.

Also read: Airtel plans $2 billion Capex during FY 2014-15 focusing on 3G and data networks

As per strategy of Reliance Communications, it will focus on bundling by introducing products and services like the recently launched Zero Plan to build affordable ecosystem for 3G services assisting 3G services and data market to grow.

Its 3G customer base has grown 82 percent to 11.1 million. 30 percent of mobile Internet users are 3G users. Total data usage on network rose 85 percent to 41,702 million MBs, while data usage per subscriber reached 396 MB. Total number of wireless data customers rose 31.2 percent to 36.2 million.

“Riding on the development of common CDMA + GSM chipset and smartphones, we are working on reviving usage of our CDMA network to improve its contribution in our overall revenue growth,” said Gurdeep Singh, CEO – Wireless, Reliance Communications, during an analyst call last month.

Reliance Communications is looking at lower Capex because the company’s revenue growth is not in line with the top operators. Total revenue for the third quarter rose 1.9 percent to Rs 5,403 crore.

Profit grew to Rs 108 crore from Rs 105 crore, while EBIDTA increased 11.6 percent to Rs 1,845 crore during the third quarter of fiscal 2014.

Reliance Enterprise business

In domestic Enterprise business, Reliance’s Pay Per Use model for Data Centre business continues to have strong traction in the Enterprise market, with large order in Q3 from a MNC and a foreign bank.

In addition, it bagged orders from UP Power Corporation, National Informatics  Centre,  Electronics  Corporation  of India, and Bihar Electricity Distribution company.

Baburajan K
[email protected]