In the post-earnings conference call, Reliance Communications brass revealed the reason behind the variations in revenues it reported to the stock exchange BSE and Telecom Regulatory Authority of India (TRAI): revenue from sale of handsets was included in its wireless revenues.
The Indian Department of Telecommunication (DoT) had appointed a special audit task force to review financials of the telco, which was under suspicion of manipulating its accounts to the tune of Rs. 29.15 billion and evading licence fees to the tune of Rs. 3.16 billion. The task force reported no findings on the alleged inflation of revenue and RCOM clarified 2 weeks ago that the differences in revenues, brought into the limelight by analysts, were in fact reconciliations prepared and filed by the company.
From the earnings call: “The debate on the difference between the financial report revenue and the revenue reported to the TRAI for AGR purposes , the reconciliation has also been submitted and which is in the domain of everybody. The handsets which were of proprietary nature were part of it along with the cost of the proprietary handsets.”
Interestingly, following this, Tata Teleservices Maharashtra was asked on their earnings conference call whether they include handset revenues revenues in their wireless revenues. They said they do not.
Early signs and trends following the launch of the telco’s Simply Reliance Plan in the first week of October were encouraging thanks, in part, to the prevalence of multi-SIM cards.
Idea Cellular had noted in its earnings call how multiple SIMs are now used by 20% of all India subscribers. The use of the sub-Rs. 20“Dual-SIM device” has mushroomed causing a boom in the number of subscribers reported by telcos. In connection, read Medianama’s Editorial: The Benefits Of Over-reporting Indian Mobile Subscribers Numbers.
So it does not come as a surprise that RCOM announced, “Whether the MoU, call pattern, or in terms of the multiple SIM users, and with more and more subscribers taking on Simply Reliance, things are very positive. It’s too early for anything specific in terms of impact. We expect with this plan that the MOU will show a bit of elasticity and grow and as for other parameters, it is too early to comment on it.”
VAS Revenues Impacted
The new guidelines set up by TRAI to empower customers, requiring explicit consent from subscribers and and reconfirmations for WAP usage have resulted in RCOM’s value added services being impacted in the short term.
Website Undergoes Redesign
RCOM’s portal has taken on a new look with a cleaner landing page and replacement of its original blue facade with an appealing white and pink contrast. The new layout is much simpler to navigate and appears to be modified to make it more customer-centric, certainly a much-needed change.