The telecom sector showed mixed performance in the October-December 2009 quarter. Barring Bharti Airtel, most of the telecom operators witnessed a decline in their bottom lines, largely due to the recent reduction in tariffs. According to industry analysts, the impact of the falling tariffs will only increase in the next fiscal year as the majority of subscribers migrate to the new per-second-billing schemes.
Moreover, with operators such as Videocon and Etisalat DB still in the process of rolling out mobile services, the competition is likely to intensify. Besides, the implementation of mobile number portability services is expected to add further pressure on operator margins.
Meanwhile, other telecom players such as Tata Communications, GTL Infrastructure, Spice Mobiles, Tulip Telecom, Sify and Net4India have all had a positive financial growth.
tele.net takes a look at the financial performance of some of the listed telecom players for the quarter ended December 2009…
Bharti Airtel
Bharti Airtel recorded a growth of 2 per cent in its net profits from Rs 21.59 billion to Rs 22.1 billion between the quarters ended December 2008 and December 2009. Its consolidated total revenues also rose by 1 per cent to Rs 97.72 billion during the same period.
Earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 1 per cent to Rs 39.11 billion as compared to the corresponding period in the previous year. The company continued to leverage its scale and strategic partnerships to secure cost efficiencies leading to an improvement in its EBITDA margins from 41.1 per cent to 41.3 per cent during the same period.
However, the company’s average revenue per user (ARPU) fell from Rs 324 to Rs 230 as it launched new pricing plans.The average minutes of usage (MoU) also suffered a decline from 505 to 446 on a year-on-year basis.
Reliance Communications
Reliance Communications (RCOM) recorded a 21 per cent drop in its net profits from Rs 14.1 billion in the quarter ended December 2008 to Rs 11.08 billion in the reporting quarter. This is despite foreign exchange gains on its overseas convertible bonds due to the appreciation of the rupee.
The company’s revenues also dropped 9 per cent from Rs 58.5 billion in October-December 2008 to Rs 53.1 billion in the quarter ended December 2009. Its ARPU fell 7.5 per cent to Rs 149 over the same period.
Idea Cellular
Idea Cellular reported a 22.5 per cent decline in its quarterly net profits from Rs 2.19 billion in the quarter ended December 2008 to Rs 1.7 billion in the reporting quarter. The consolidated revenues, on the other hand, witnessed a 15 per cent rise from Rs 27.3 billion to Rs 31.49 billion during the same period, mainly on account of the increasing usage and subscriber base. These include revenues realised from the consolidation of 41 per cent stake in Spice Telecom and 16 per cent stake in Indus Towers.
The pan-Indian player has lowered its capital expenditure for this fiscal year from Rs 55 billion to Rs 40 billion, partly on account of the gains from exchange rate changes and partly due to lower-thanexpected growth in MoU.
Mahanagar Telephone Nigam Limited
State-owned operator Mahanagar Telephone Nigam Limited (MTNL) posted a net loss of Rs 8.95 billion in the reporting quarter compared to a net profit of Rs 530.98 million in the corresponding quarter in 2008. The company’s net sales also fell by 18.8 per cent on a year-on-year basis. MTNL’s earnings per share declined from Re 0.85 to Rs (13.91) between the quarter ended December 2008 and 2009.
The EBITDA for MTNL’s wireless segment witnessed a 70.6 per cent decline to Rs 92.11 million, while its revenues from cellular services fell by 22 per cent year-on-year due to the reduction in tariffs. Its wireline segment revenues also fell 24.8 per cent year-on-year to Rs 7.4 billion, with the EBITDA for this division falling to Rs 9.49 billion compared to Rs 251.21 billion in the December 2008 quarter. While MTNL lowered its administrative expenses year-on-year, its staff expenses rose significantly on account of a 4 per cent increase in the dearness relief for retirement benefits.
Tata Teleservices (Maharashtra) Limited
The net loss for Tata Teleservices (Maharashtra) Limited (TTML) widened from Rs 0.48 billion to Rs 1.03 billion between December 2008 and December 2009.However, the company registered a 16 per cent growth in its revenues to Rs 6.03 billion as compared to Rs 5.18 billion during the same period.
TTML also registered an EBITDA of Rs 1.35 billion in the reporting quarter compared to Rs 1.51 billion for the quarter ended December 2008. The operator’s subscriber base at the end of the third quarter of 2009-10 stood at 11.5 million, registering an increase of 74 per cent over the corresponding quarter in the previous year. Its wireless MoU also increased by 39 per cent year-on-year.
Tata Communications
The operator recorded a threefold increase in net profits from Rs 0.82 billion in the quarter ended December 2008 to Rs 2.82 billion in the third quarter of the current fiscal year. However, its revenues declined from Rs 10.31 billion to Rs 8.23 billion during the same period. The company has cut down on its network costs by 29.96 per cent on a year-on-year basis.
GTL Infrastructure
GTL Infrastructure reported a net profit of Rs 230.5 million in the quarter ended December 2009 against a net loss of Rs 14 million a year earlier. Its net sales increased by 58 per cent from Rs 579.1 million to Rs 915.6 million during the same period. The total costs for the company increased by 9.5 per cent from Rs 661 million in the third quarter of 2008 to Rs 724 million.
Spice Mobiles
Spice Mobiles recorded a net profit of Rs 224 million in the quarter ended December 2009 compared to a net loss of Rs 34 million in the corresponding quarter of 2008. It recorded revenues of Rs 2.99 billion, up from Rs 1.21 billion.
The company is looking to expand its global footprint. It has already entered the Bangladesh and Nepal markets, and is now looking to foray into Africa. Spice Mobiles is also in the process of merging with Spice Televentures to consolidate the group’s telecom business.
Tulip Telecom
The company posted an increase of 38.2 per cent in its net profit from Rs 0.49 billion in the quarter ended December 2008 to Rs 0.68 billion in the reporting quarter.Its revenues also increased by 13.4 per cent to Rs 5 billion from Rs 4.42 billion during the same period.
Net4 India
The net profits of network services provider Net4 India increased by 28 per cent from Rs 25 million to Rs 32 million between the third quarter of 2008-09 and the current fiscal year. It recorded a total consolidated income of Rs 511.5 million in the reporting quarter compared to Rs 337.9 million in the corresponding quarter of the previous fiscal year, registering a growth of 51.35 per cent.
Sify Technologies
The company’s net profit for the third quarter was $9.46 million against a net loss of $5.54 million in the same quarter of 2008. It reported an 18 per cent increase in revenues between the quarter ended December 2008 and the quarter ended December 2009. Sify’s growth was primarily driven by revenues from its enterprise services while its international services revenues remained the same as in the previous quarter.
