Uninor is starting to show EBITDA improvement and according to its quarterly financials release, it is on track towards becoming an ultra low cost operator. However, the company still feels that the regulatory framework is still unclear and has urged Indian authorities to provide clarity. It expects to achieve EBITDA breakeven in the first half of 2013 and has maintained peak funding of Rs 155 billion or Rs 15500 crore.
With a net subscriber growth of 2.8 million during the quarter ended 30th September 2011, the operator has 24.2 million subscribers in the Indian market. Uninor holds UAS licence to offer mobile services in the 22 telecom circles in India. It has rolled out in 21 circles and is commercially present in 13 circles.
Uninor reported revenues of NOK 837 million (approximately Rs. 754.2 crore) for the quarter ended September 30th 2011, a QoQ increase of 20%. The company’s revenue in the same quarter last year stood at NOK 214 million. It registered an EBITDA loss of NOK 849 million(Rs 765 crore) lower than previous quarter,also due to a positive effect of NOK 47 million from reversal of accruals related to energy costs. According to the company EBITDA improved 15% YoY from the third quarter of 2010 primarily due to increased volume, scale efficiencies and cost optimisation. Its operating loss was at NOK 1084 million.
Uninor had begun offering services in December 2009. Telenor owns 67.25% in Uninor, while the Unitech Group owns 32.75%. It’s accumulated operating cash flow loss is Rs 108 billion since entry.
ARPU & CAPEX
Uninor has added 2.8 million subscriptions, compared to 4 million in the last quarter and its total subscriber base is at 24.2 million. The company’s ARPU was Rs 108.1 (12 NOK) for the quarter, almost stable compared to the last quarter but increased 5% in local currency. Total revenues increased by 22% compared to second quarter 2011 following a 14% growth in subscription base and increased average usage.
The Capital expenditure was NOK 196 million (Rs 176.6 crore), related to the roll out of new sites in thirteen circles where Uninor has launched services.
682 new sites were deployed in the last quarter. Uninor has a total of 27,305 sites in the country.
Funding & Case Initiated By Unitech
Telenor informs that the board of directors of Uninor have approved rising of funds through a rights offering of up to Rs 82.5 billion, which is now under process of being implemented. Unitech Ltd. has initiated arbitration proceedings in Singapore on this matter.
In a separate process, Unitech Ltd. has on 11 October 2011 initiated a process before the special judicial body Company Law Board (CLB) in India by filing a petition against Uninor, the Telenor-appointed directors on the Uninor board, Telenor Asia Pte Ltd. and Telenor ASA. In its petition, Unitech Ltd. is alleging that the respondents have oppressed the minority shareholders and mismanaged the business of Uninor. Telenor’s opinion is that there is no legal or factual basis to support the claims and allegations made by Unitech Ltd. in the arbitration and CLB proceedings
Full Year Guidance
For the full year (2011) Uninor expects to contribute an EBITDA loss around NOK 3.5 to 4 billion and capital expenditure in the range of NOK 1.0 billion.
Telenor updated investors about the 2G scam investigation in India. It said:”In India, Uninor and many other telecoms operators as well as the federal government through the Department of Telecommunications and the Telecom Regulatory Authority of India have been named as respondents in public interest petitions filed before the Supreme Court. These petitions seek cancellation of the licenses granted by the government in January 2008 to such operators, an imposition or punitive damages on grounds of alleged irregularities in granting the licenses, failure to meet eligibility requirements and delays in meeting rollout obligations. The petitions were being heard by the Supreme Court since 1 March 2011 in day-to-day proceedings and are now completed. On 2 April, the Indian Central Bureau of Investigation presented its first charge sheet, naming the managing director of Unitech Ltd., Mr. Sanjay Chandra, and also naming Unitech Wireless Ltd. for actionswhen it was fully owned by Unitech Ltd., prior to Telenor Group entering India. On 22 October, the criminal court formally charged everyone mentioned in the charge sheets. The trial will begin on 11 November.”