While its consolidation with the larger telco Idea Cellular bears on, Spice Communications continues to suffer high quarterly losses of Rs. 624.5 million, showing a 79% rise in the quarter ending September 2009 from the previous quarter. The final hearing of the consolidation has been set for December 15, 2009. Spice’s losses are 22.93% lower than that recorded in the same quarter last year, and revenue, at Rs. 3409.1 million, is up 10.31% to Rs. 3409.1 million year on year. Sequential sales growth is still poor at 3.18%, similar to last quarter.
Network operating costs rose 9.76% to Rs. 986.4 million with a network expansion initiative in Karnataka. Licence fees also increased but the company managed to limit personnel expenditure to Rs. 139.7 million in the quarter. Basic EPS has fallen further to -Rs.0.91.
Spice spent Rs. 543.4 million on subscriber acquisition, advertisement and business promotions, and, from independent body COAI reports, seems to have added a total of 376,296 subscribers in its two circles of operation – Karnataka and Punjab – in the quarter. In the month of September, Spice added 65,023 connections in Karnataka and 143,732 in Punjab, whereas Idea Cellular added 1.39 million connections in September 2009. Idea now has 51.4 million connections but is not yet a pan-India operator with 19 of 22 circles.
According to the company, Spice also owns licences for Delhi, Haryana, Maharashtra and Goa, and Andhra Pradesh, which were not rolled out. These licences are in the process of being de-merged as they overlap with Idea networks.
ABTL To Merge Licences With Idea
Another subsidiary under the group – Aditya Birla Telecom Ltd or ABTL – holds 2 licences for the circles Bihar and Jharkhand. This firm will soon merge licences with Idea Cellular, according to the Economic Times; the restructuring is expected to complete by year end. Bihar is the fastest growing circle in India and is a C-circle that Idea has yet to tap. With more VAS like Krishi Vouchers, the addition of the two circles could be the boost Idea needs. ABTL will hold 16% stake in Indus Towers, currently one of the largest tower operators in India. It will also run Idea Cellular Towers Infrastructure, the tower business that was demerged from Idea Cellular in July. ICTI owns 11,000 towers in nine circles. Idea’s competitor Vodafone Essar also demerged its tower business Ortus Infratel in July. Read more news of Telecom Operators on Medianama.