With a mere 9% rise in 2011 telecom revenue, heads roll at Indian mobile operators

By Telecom Lead Team: In a span of
around six months, more than six CEOs / CXOs resigned from Indian telecom
operators. This include Syed Safawi of Reliance Communications, Atul Bindal of
Bharti Airtel, Shamik Das of S Tel, Malickarjun Rao, Rahul Saigal and Gurdeep
Singh of Aircel, Sushil Prakash and Pankaj Sethi of Tata Teleservices
and top team at Virgin Mobile India.

 

Industry experts say more resignations
are expected as the telecom service revenues and profits are under pressure.

 

Sunil Mittal, chairman of Airtel,
has already indicated that there will be tariff hike if there is further
increase in spectrum and other charges from the government.

 

Airtel Sunil Mittal indicates tariff
hike if spectrum charged


According to Ovum, Indian telecom
service providers’ revenue is likely to grow at 9.5 percent to $38.59 billion
in 2011 from $35.24 billion in 2010.

 

Out of this, mobile service revenue
is likely to grow at 13.7 percent to $29.75 billion in 2011 from $26.16 billion
in 2010.

 

Airtel and Reliance Communications
will be announcing their Q3 2011 financial results in the next few days. Idea
Cellular net profit plummeted 17.31 percent to Rs 200.98 crore in the third
quarter of current fiscal from Rs 243.05 crore in the same quarter last fiscal.

Idea net profit plummets 17% in Q3
2011


Idea
Cellular has posted 27.17 percent increase in revenue in Q3 FY 2011-12 at Rs
5,030.82 crore as compared with Rs 3,955.61 crore in the corresponding quarter
in previous year.

 

VAS
contribution increased to 13.7 percent in Q3 FY12 from 13.2 percent in Q2 FY12.
Mobility revenue in Q3 was Rs 4,992.4 crore as compared with Rs 3,928.09 crore
in Q3 FY 2010-11. ILD revenue grew to Rs 63.73 crore from Rs 48.15 crore. Idea
Cellular’s nine-months revenue grew 25.76 percent to Rs 14,171 crore.

 

If the government decides to charge
spectrum, there will be more pressure on revenue and profit of Indian mobile
operators.

 

Recently, the Telecom Regulatory
Authority of India (TRAI) recommended over six-fold jump in the 2G spectrum
price and has left the decision for levying a one-time charge for additional
spectrum beyond the contracted limit of 6.2 Mhz to the government.

 

It had recommended that each Mhz of
additional spectrum, after the 6.2 MHz limit held by operators, should have
one-time cost of Rs 4,571.87 crore for all of India.

 

However, from circle to circle, it
would vary and the operators would have to pay only for those areas where they
hold extra spectrum.

 

Apex decision making body of
Department of Telecom, the Telecom Commission has recommended to charge for
spectrum beyond 4.4 Mhz instead of 6.2 Mhz.

 

By Baburajan K
[email protected]

 

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