RCom net rises, but lags expectations

Reliance Communications on Friday recorded an increase of 1.9 per cent in its net profit at Rs 156 crore for the September quarter, as voice business continued to remain under pressure. The revenue and net profit of the Anil Ambani-led company were below Street expectations for the period as its voice call operations slowed down compared with April-June period.

It reported a net profit of Rs 156 crore on a revenue of Rs 5,355 crore during the quarter. The net income was two per cent higher than Rs 153 crore posted in the same period a year ago, but lower than Rs 177 crore net profit seen in previous quarter. Revenue also was lower in the September quarter from Rs 5,541 crore seen in the June quarter.

According to analysts polled by Bloomberg, the company was to post a net profit of Rs 169 crore on a revenue of Rs 5,508 crore.

Its operating profit from India operations dipped to Rs 1,663 crore during the period, down 3.4 per cent from the year-ago period. Major telecom operators reported less-than-expected results during the quarter because of cheaper calls. RCom's immediate competitor and third-largest player Idea Cellular posted a 1.3 per cent drop in revenue sequentially during the period. The September quarter is usually considered a weak period for telecom operators as network disruptions during the monsoon season affects network connectivity.

The company now has 37.2 million data customers, a rise of 25.3 per cent from September last year, including 19.1 million 3G customers. Mobile internet traffic for the telecom operator jumped 48 per cent year-on-year during the quarter to reach 97.3 billion megabytes, due to higher data usage per subscribers and rise in mobile internet users, it said in a statement.

During the quarter, RCom witnessed a total voice minutes of 102.5 billion, lower than Rs 105 billion seen in the previous quarter. The drop in voice minutes usages nudged down the operating profit. The company, however, reported 45 paise per minute call revenue during the period, up from 44.5 paise reported in the April-June period.

Earlier this month, RCom agreed to buy Indian operations of Russia's Sistema, which operates under MTS brand in nine circles across India. This gave RCom access to nine million customers of MTS and Rs 1,500 crore annual revenues.

Also, the deal will allow RCom to have 800 Mhz spectrum of MTS - for 4G services, to complement its own unique nationwide footprint of minimum 5 MHz contiguous 800/850 MHz spectrum aggregating 148.75 MHz.

It plans to share spectrum with Mukesh Ambani's Reliance Jio for launch of 4G services, allowing RJio to become a pan India 4G player.