India's RCOM helped by higher mobile data, lower competition

India’s RCOM helped by higher mobile data, lower competition

07 FEB 2014

Reliance Communications (RCOM), India’s fourth-largest mobile operator, was helped by a fast-growing base of data users during the three months ended December 2013.

Less competition in its domestic market, with smaller players falling by the wayside, also allowed RCOM to hike up tariffs and boost ARPU.

RCOM’s number of data customers increased by 31.2 per cent, to 36.2 million, compared with the end of 2012. Total data traffic is up 85.2 per cent over the same period.

The data subscriber tally includes 11 million 3G subscribers.

RCOM reported that ARPU was up 11.6 per cent, to INR125, despite minutes of usage falling by 1.8 per cent – a sign that the operator has had some leeway in raising tariffs.

Despite the positive news at home, RCOM, at a group level, was only able to chalk up modest gains in net profits and sales for its fiscal third quarter as operations abroad weighed on results.

Group net income was INR1.08 billion ($17.4 million), a 2.8 per cent increase for the same quarter the year before.

Overall turnover grew by 1.9 per cent, to INR54 billion, over the same period.

By contrast, global operations – which accounts for around a fifth of group revenue – suffered an 8.3 per cent fall in Q3 revenues, year-on-year, to INR11 billion.

EBITDA abroad fell by 6.6 per cent, to INR2.4 billion, over the same period. It translates into an EBITDA margin of 21.9 per cent for its global operations.

Factor in the better domestic performance, however, and group EBITDA margin shoots up to 34. 2 per cent.

“EBITDA margin at 34.2 per cent, amongst the highest in the industry, with strong contribution from both India and global businesses,” stated a press release from RCOM.

RCOM underlined, too, its November deal with Apple to offer the iPhone 4s, 5c and 5s “with attractive customer offerings”.

The “game-changing offers”, as RCOM calls them, are INR2,499 ($40) per month for the iPhone 4s: INR2,999 per month for the Phone 5c; and INR3,599 per month for the iPhone 5s.

All deals are 24-month contracts. They include handset cost, unlimited local and STD calls, SMS, national roaming and 3G data.

Author

Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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