RCom helped by higher voice margins, but still losing customers

RCom helped by higher voice margins, but still losing customers

15 AUG 2014

RCom, which runs the fourth-largest mobile operator in India, saw Q1 net profit jump 21 per cent to INR1.32 billion (US$21.6 million) – largely on the back of higher domestic voice-call charges – but overall revenue growth was slowed by a shrinking subscriber base and a fall in sales from global operations.

During the three months ended June, RCom’s ARPU was INR136 (up from INR128 the previous quarter). A less competitive market has given RCom some wiggle room to raise voice call tariffs.

Revenue in India, which accounts for 81 per cent of group revenue, was nonetheless up a more sedate 1.3 per cent – to INR4.7 billion – compared with the same quarter the year previously.

Not helping the top line was a fall in the operator’s overall subscriber base to 110 million (112 million three months previously).

And compared with fiscal Q4 2014, RCom’s Q1 net income was down 16 per cent. Higher capital expenditure and financing costs were contributory factors

More encouragingly, RCom is seeing fairly strong growth in mobile data, albeit from a small base.

The number of RCom customers signing up to a data plan in India grew 51.3 per cent, to 28.6 million. Of that number, 13 million were 3G customers, up 1 million from three months previously. RCom claims it has the largest 3G subscriber base in its home market.

Sales from RCom’s global operations – which includes enterprise, IT and international long-distance calling – dropped 5.1 per cent, to just over INR1 billion.

Net debt stood at INR402.2 billion as of 30 June, up very slightly from INR401.8 billion three months previously.

Through an extensive cost-cutting programme RCom says it can achieve annualised savings, starting from Q2, of over INR6 billion.

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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