RCOM's Revenues Fall 3.9% QoQ, MoU Up 23.4%

Updated with key performance indicators from quarterly report

Despite sagging revenues in the quarter ended December 2009 on account of its “bold, new” Simply Reliance tariff plans for its mobile subscribers, cellular operator Reliance Communications has posted a 57.3 percent rise in net profits compared to the September quarter. Comparatively, rivals Bharti Airtel and Idea Cellular experienced an erosion of their net profits in the December quarter.

Details: Release | Financials: Consolidated, Standalone | Quarterly Report

RCOM’s revenues were down 3.9 percent sequentially and 6.8 percent year on year. The company spent Rs. 2.8 billion on license fees, lower by 7.3 percent from the December 2008 quarter. Access charges have risen 15.3 percent sequentially to Rs. 5.5 billion. RCOM Chairman Anil Ambani has said that despite the sharp falls in tariffs, wireless revenues and margins were stable in the quarter.

EBITDA Drops To Rs. 18.13B

EBITDA has fallen to Rs. 18.13 billion in the December 2009 quarter from Rs. 20.2 billion in the September quarter. The earnings per share has appreciated to Rs. 5.37 compared to the Rs. 3.59 reported in the previous quarter.

Previous Earnings: July 2009, September 2010

ARPU At Rs.149, Long Distance Mins Up

RCOM added 7.67 million mobile connections in the quarter, and has a total of 93,795,613. Its wireless market share has reduced to 18.1% from 18.5%.

Only 5% of its mobile userbase have postpaid connections – churn has shot up to 2% from 1.3%.

Wireless average revenue per user was recorded as Rs..149 in the quarter, lower than the Rs. 161 recorded in the previous quarter. Wireless revenue per minute is lower at 45 paise than Idea Cellular’s 51 paise.

The operator has noted that its minutes of use are up 23.4 percent sequentially to 89 billion. Wireless minutes of use per subscriber is lower at 330 minutes per month in the December quarter. The company has witnessed a sequential rise in long distance minutes, from 13,370 in the September quarter to 16,466 in the December quarter.

In its broadband segment too, RCOM has seen a reduction in average revenue per line – down from RS. 1794 to Rs. 1642.

Segment Wise Revenues: Wireless Down YoY

Wireless revenues are at Rs. 40,225 million, down year on year and up quarter on quarter from Rs. 44,119.4 million recorded in the December 2008 quarter and Rs. 40,099.9 million in the September 2009 quarter respectively.
Global – revenues from enterprise services are sequentially lower at Rs. 19,818.2 million and up year on year.
Broadband revenues have fallen from the Rs. 7699.6 million recorded in September 2009 to Rs. 7045.3 million.

Besides mobile services, RCOM also operates in broadband (Net Connect), fixed wireless (Hello), tower (with Infratel), enterprise services (with Globalcom, under which are subsidiaries Flag, Vanco and Yipes), investment funding, DTH (Big TV), IPTV, BPO and retail (with RWorld and Reliance Mobile Stores) sectors.

DTH

Reliance Big TV currently has 2.23 million subscribers, the company claims it has about 12% of the DTH market in India.

Key Developments In The Quarter

The operator came under the scanner of the Indian Department of Telecommunication for alleged manipulation of its accounts and evasion of its licence fees to the tune of Rs. 3.16 billion. RCOM clarified in November that the differences in revenues, brought into the limelight by analysts, were in fact reconciliations prepared and filed by the company. It registered a complaint against the auditor in December and telecom minister A Raja claimed the Government might have lost about Rs. 250 crore due to this.

RCOM launched Games on the USSD platform, such as Tic Tac Toe, for its GSM subscribers in December.

It entered into a strategic partnership with Mumbai-based Atom Technologies for e-commerce applications, and expects this service to drive 30% of its m-commerce traffic volume on its GSM and CDMA networks.

It also brought Moko.mobi, a mobile social community to its users.

Reliance Communication launched new tariff variants under its Simply Reliance Plan in the quarter.

Reliance Communications was looking to sell 3-5 percent stake in its tower unit Reliance Infratel and offload 10 percent of its equity in the IPO.

More recently, Reliance launched comics on mobile for its GSM subscribers in association with VAS firm Nazara Technologies and channel Cartoon Networks.

– Idea Cellular ARPU Crashes, PAT Down 22%

– RCOM Net Profit Drops 54.8% QoQ; ARPU At Rs. 161