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RCOM lost 3.8M mobile Internet subscribers during the quarter that Jio launched

Reliance CDMA Tab 2

Anil Ambani’s Reliance Communications (RCOM) lost 3.8 million mobile Internet subscribers during the quarter when Reliance Jio made its entry: the company reported 35.1 million mobile Internet connections for the quarter ended September 2016 (Q2 FY17). Year on year, the mobile Internet connections were down 5.6% from 37.1 million connections.

This shift is attributed to the company’s migration from CDMA to 4G, which it carried out in early April, and the launch of Reliance Jio (with offers of free data and calls). RCOM says it has now switched off its CDMA network, which has resulted in some subscribers moving out: it lost 3.7 million customers in the last quarter, when it started the 4G switch, and in this quarter, it lost as many as 11.6 million customers. Currently RCOM has a total subscriber base of 88.3 million, down from from 111.5 million in the same quarter last year.

Note that RCOM does not consider users who have consumed less than 1 MB/month as data subscribers since Q4 FY15.

3G+4G connections vs 2G connections

The companys mobile broadband (3G + 4G) connections accounted for 69.8% of all data connections, with 24.5 million connections in this quarter. The segment was down 3.5% quarter-on-quarter from 25.4 million mobile broadband connections. RCOM had a 2G connections of 10.6 million in this quarter, down from 13.5 million in the previous quarter. Its 3G mobile Internet base had surpassed 2G in Q1FY16.

Marginal growth in mobile Internet usage and ARPU

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– Total mobile data traffic was 104,802 million MB in Q2FY17, up from 102,436 million MB in the previous quarter
– Data usage per connection increased to 944 MB per data customer from 878 MB per data customer in the preceding quarter.
– Average revenue per user (ARPU) was up Rs 155 in Q2FY17 from Rs 148 in the previous quarter, and up from Rs 138 in the same quarter last year.
– Revenue per minute for the quarter decreased to Rs 0.446 from Rs 0.452 in the previous quarter.

Voice revenue declines by 8% QoQ

– The company reported voice revenues of Rs 2791.2 crore during Q2FY17, down 8.3% from Rs 3045.2 crore in the previous quarter, and down 16.8% from Rs 3358.5 crore voice revenues in the same quarter last year.
– RCOM reported non-voice revenues of Rs 1572.5 crore for Q2 FY17, up 6.5% quarter-on-quarter from Rs 1475.9 crore in Q1FY17.

Financials

– The company reported a consolidated net profit of Rs 38.8 crore, down 28.4% from Rs 54.2 crore in the preceding quarter.
– Total consolidated revenue stood at Rs 5141.8 crore for this quarter, down 4% from Rs 5361.2 crore in Q1FY17.
– India operations revenues were at Rs 4487.8 crore during this quarter, down 4.4% from Rs 4693.2 crore in the preceding quarter.
– Overall EBITDA stood at Rs 1541.8 crore for Q2FY17.

Download: Quarterly Report

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