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RCOM Non-Voice Revenues Flat For Q3-FY14

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Reliance Communications (RCOM) reported India telecom revenues of Rs 4,637.4 crore for the quarter ended December 31st, 2013 (Q3-FY14), registering minor growth quarter on quarter (QoQ) from Rs 4,623 crore in the previous quarter. The quarter saw non-voice revenues for the company being flat QoQ, at Rs 1,018.5 crore, as opposed to Rs 1018 crore, even though data usage on the companys network increased significantly. Voice revenues for the company were also marginally higher at Rs 3,416.7 crore, from Rs 3,384 crore for the quarter, up 1%.

Note that Reliance Communications has changed its segmental reporting from last quarter, since it has re-organized its business into two units – India and Global operations. Therefore, it no longer discloses wireless revenues or wireless EBITDA, so it’s difficult to get a sense of how its mobile voice, mobile VAS and mobile Internet businesses have performed. There is less operational data available on the company than their once was.

India operations for the company accounted for 80% of its business. Read about its Mobile Internet business highlights here.

Operational Highlights

– Wireless minutes of usage grew marginally to 101.9 billion for the quarter, up from 101.5 billion last quarter, but still lower than the 106.3 billion it reported in Q1. Q3 is expected to be a good quarter for telecom, so this decline is disappointing.
– Average revenue per user (ARPU) increased to Rs 125 for the quarter, up from Rs 120 in the previous quarter. This indicates that either rates were increased, or customers were weeded out. There is some indication that the push to add customers wasn’t substantial, given that RCOM has only reported net customer additions of 1 million for the entire quarter.

– Revenue per minute for the quarter increased to Rs 0.435 from Rs 0.434 the previous quarter, and Rs 0.421 in the quarter before, indicating that the focus has shifted to profitability over customer additions.

– Voice ARPU increased to Rs 96 over Rs 92 last quarter

– Voice usage per customer/month increased to 288 minutes from 277, and given the marginal increase in total minutes of usage, it appears that dormant customers or low usage customers were reduced.

– Voice revenue per minute increased to Rs 0.335


Reliance Digital TV

– Reliance Digital TV has remained flat at 4.7 million subscribers QoQ, with a claim of 8% share of the DTH market in India. We’re not sure if RCOM is actually providing updated data since this has been the same for the last few quarters.
– Reliance Digital TV is available at more than 36,000 outlets across 8,366 towns in the country, down from 37,000 outlets across 8,366 towns in the country in the previous quarter. That’s one town added and 1000 outlets reduced from the last quarter.
– The Set Top Box (STB) failure rate decreased to 0.78% from 0.86% last quarter, but still isn’t at the 0.59% in Q1. However, the company claims to have best failure rate in India and Internationally.

Consolidated Financials

– Total revenue was at Rs 5,403 crore, down 7.4% from Rs 5835.4 crore the previous quarter. This includes a writeback of provision for business restructuring of Rs 441 crore.
– Net profit for the period was Rs 108.4 crore, down 83.9% from Rs 675 crore the last quarter.
– Indian operations generated gross revenues of Rs 4637.4 crore for the quarter, up marginally from Rs 4623.9 crore in the previous quarter. EBITDA was Rs 1,606 crore, down from 1,640 crore the last quarter. Indian operations account for 80% of RCOM’s total revenues for the quarter.
– Global operations reported revenues of Rs 1,089 crore for the quarter, down from Rs 1,139 crore in the previous quarter. EBITDA was Rs 239.1 crore for the quarter, down from Rs 246 crore in Q2-FY14.

Download – Financials | Quarterly report

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