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The VAS and Data Revenues accounted for 39% of Tata Teleservices Maharashtra Ltd (TTML)’s total wireless revenues for the quarter ending June 30, 2013 (Q1-FY14), up from 37% in the previous quarter and 35% in the same quarter last year.

Its worth noting that the VAS and Data Revenues segment for Tata Teleservices includes earnings from its EVDO based (USB data card) connectivity business Tata Photon. Also, TTML is the sister company of Tata Teleservices Ltd (TTSL), and is operational in Goa, Maharashtra and Mumbai circles. While TTSL is not listed, both the two companies operate mobile services under the Tata DOCOMO brand.

Highlights

– Tata DOCOMO partnered browser maker Opera to offer a co-branded version of Opera Mini to Tata DOCOMO subscribers.

– Tata DOCOMO inked an exclusive agreement with GMR Airports to offer Wi-Fi services at the Indira Gandhi International Airport in New Delhi and the Rajiv Gandhi International Airport at Hyderabad.

– Tata DOCOMO had partnered with the online music streaming service Saavn to launch music-oriented data plans to its 2G and 3G prepaid GSM subscribers.

– During the quarter, Tata DOCOMO launched unlimited voice and data plans, as part of its Always Plus product portfolio for both prepaid and postpaid customers.

– It also reduced its 2G and 3G tariff by 90% for both existing and new prepaid customers from July 1, 2013. The company had reduced the volume based charges on 2G data recharge vouchers of three denominations and a single 3G data recharge voucher to 1 paisa per 10 KB from the existing 10 paisa per 10 KB.

DoT One-time Spectrum Fee

TTML informed that Department of Telecommunications (DoT) had imposed a one-time spectrum fee of Rs 290.17 crore for holding spectrum above 2.5MHz in the 800 MHz bands effective from January 1, 2013. Following this, the company had filed a writ petition challenging this order and had obtained a stay order from the Calcutta High Court.

However, TTML later decided to surrender additional CDMA spectrum beyond 2.5 MHz in Maharashtra circle and surrender 1.25MHz CDMA spectrum in Mumbai, while retaining the remaining 3.75MHz spectrum, for which the company has to pay a one-time license fee of Rs 104.58 crore. TTSL is also surrendering spectrum additional CDMA spectrum beyond 2.5 MHz in all circles, except Delhi.

TTML informed that it had paid the first installment of Rs 29.90 crore for the year under protest and expects that this spectrum surrender wouldn’t have any significant adverse effect on the company’s business.

DoT however has apparently said that TTML should surrender unconditionally and it should pay spectrum charges until such time. In response, the company has said that the surrender was without prejudice and subject to the outcome of the company’s writ petition filed at the Mumbai High Court. The High court has now apparently directed DoT not to take any coercive action against the company.

Financials

TTML reported increased losses of Rs 126.9 crore for the quarter, up 10.2% from Rs 115.2 crore loss in the previous quarter but a 22% improvement from Rs 162.7 crore loss in the same quarter last year.

The total revenues were at Rs 696 crore for the quarter, a marginal dip from Rs 702 crore in the previous quarter and up 5% from Rs 663 crore in Q1-FY13. The EBITDA for the quarter was Rs 162 crore, flat from Rs 162 crore in the previous quarter and up 20.9% from Rs 134 crore in Q1-FY13.

Public Shareholding

Due to an amendment to SEBI’s Securities Contracts (Regulation) Act in June 2010, all public listed companies are now required to maintain a minimum 25% stake in public holding and Tata Teleservices informed that it currently falls short by 2.18%.

In order to comply with this limit, the company board had recommended a bonus issue of equity shares in the ratio of 2 new equity shares for every 15 equity shares held by the members of the company with promoters and promoter group entities waiving their entitlement in this issue. This issue was approved by the company members on July 29, 2013 and it is expected to completed by August 2013, following which TTML will be compliant with this limit.

Download: Financials