cmn_ Tata Docomo

Tata Teleservices Maharashtra Ltd (TTML) reported a loss of Rs 103.31 crore for the quarter ended Q1-FY16. Losses at the telecom operator narrowed from Rs 163.88 crore from the preceding quarter. Note that this is the company’s 20th straight loss-making quarter.

The net income from telecom services however decreased to Rs 735.09 crore for the quarter, marginally down 1.45% from Rs 745.91 crore in the previous quarter and a 6.92% increase from Rs 687.51 crore from the same quarter last year.

The total income from overall operations was at Rs 750.73 crore for the quarter, a meager 0.63% increase from Rs 746.04 crore last quarter.

TTML Q1 FY16

TTML’s data revenue during the quarter grew more than 65% year-on-year and more than 10% quarter-on-quarter with improvement in data realization. “This has led to an improvement in data revenue contribution to GSM revenue by about 800 bps (basis points) over Q1 FY15,” the company said in its release. The company, however, did not provide the increase in data revenues in absolute numbers.

Note that the company stopped providing any information on the contribution of VAS and data revenues to its total wireless revenues from Q2 FY14. In Q4-FY13, TTML had mentioned that VAS and Data Revenues represented 37% of its total wireless revenues for the quarter while in Q1-FY14 (which was the last quarter TTML had provided this information), VAS and data revenues accounted for 39% of the company’s total wireless revenues for that quarter.

Tata Sons offer to buy Docomo stake

Earlier this month, it was reported that Tata Sons offered to buy Japanese telecom player NTT Docomo’s stake in Tata Teleservices Limited for Rs 23.34 a share or at around Rs 11,000 crore. The offer was made on the basis of a fair market value determined on June 30, 2014. Earlier in March, the Reserve Bank of India (RBI) had rejected Tata Sons’ offer to buy back Docomo’s shares at the pre-agreed valuation of Rs 58 a share (~Rs 27,000 crore for the stake).

In November 2008, Docomo had invested $2.2 billion in Tata Teleservices with an understanding that it would get at least 50% of its acquisition price if it exits the Indian company in five years. However, the company’s metrics continued to falter and it reported net losses of ¥85,026 million (Rs 4,887 crore) for the year ended March 31, 2014 (FY14), an increase from ¥72,301 million loss (Rs 4,155 crore) in the previous year FY13.

It’s worth noting that TTSL is an unlisted company unlike its BSE listed sister company Tata Teleservices Maharashtra Limited (TTML). While TTML is operational only in Goa, Maharashtra and Mumbai circles, it, along with TTSL, provides mobile services under the Tata DOCOMO brand in the country.

Bond issue

During the quarter, TTML issued Non Convertible Debentures worth Rs 750 crore. The proceeds will be used for capital expenditure, long term working capital requirements, refinancing of existing loans and other purposes in the normal course of business.

Download: Press release and financials