The quarter ended June 2011 saw yet another lacklustre financial performance from the telecom industry. Operators like Bharti airtel and Idea Cellular reported double-digit drops in profits, mainly on account of interest payments and higher tax rates for the quarter. Reliance Communications (RCOM), which continues to be weighed under debt, witnessed the eighth consecutive decline in quarterly profits with a 37 per cent fall.

Mahanagar Telephone Nigam Limited (MTNL) and Tata Teleservices (Maharashtra) Limited (TTML) also reported losses. Companies like GTL Infrastructure, Tata Communications and GTL Limited did not do any better. tele.net reviews the financial results of telecom companies for the quarter ended June 2011…

Bharti airtel

Bharti airtel registered a 27.72 per cent drop in its net profit for the quarter ended June 2011 to Rs 12.15 billion from Rs 16.81 billion in the quarter ended June 2010.

The operator?s total consolidated revenues, however, increased by 38.6 per cent to Rs 169.75 billion from Rs 122.85 billion during this period. Also, revenues from Bharti?s African business grew 6 per cent to $979 million from $924 million in the previous quarter. The operator?s Indian and South Asian operations sustained a double-digit revenue growth of 11.9 per cent on a year-on-year basis and 4 per cent on a sequential basis. The operator?s consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) margin stood at 33.6 per cent.

Its income before tax dropped to Rs 17.19 billion in the first quarter of 2011-12 from Rs 20.72 billion in the corresponding quarter of 2010-11. This was primarily on account of higher interest payments (Rs 3.44 billion for the Africa acquisition), 3G investments in India and 3G licence fee amortisation (Rs 1.59 billion). Also, the effective tax rate for the quarter ended June 2011 increased to 29.9 per cent, mainly due to a reduction in tax holiday benefits, which impacted net profits.

Idea Cellular

Idea Cellular reported a 12 per cent drop in its net profit for the quarter ended June 2011 to Rs 1.77 billion from Rs 2.01 billion in the quarter ended June 2010. This can be attributed to higher interest costs and tax provisioning. The operator?s finance costs more than doubled to Rs 2.46 billion during the period under review, while its tax provisioning increased  over 10 times to Rs 778 million. Profits for the quarter ended June 2011 were impacted by amortisation of the 3G spectrum fee and related interest costs after the launch of 3G services during the three-month period.

The company?s revenues, however, increased 23.73 per cent from Rs 36.54 billion for the quarter ended June 2010 to Rs 45.21 billion for the quarter ended June 2011.

The total minutes of usage (MoUs) on Idea?s network increased 6.5 per cent to 108.63 billion for the quarter ended June 2011 from 101.96 billion in the quarter ended March 2011. On a year-on-year basis, the operator?s MoUs increased by 32 per cent. The average MoUs per customer, however, declined to 391 minutes. The company claimed to have registered the lowest port-out ratio of only 58 subscribers against every 100 subscribers in the quarter under consideration.

RCOM

RCOM?s net profits decreased 37.2 per cent from Rs 2.5 billion for the quarter ended June 2010 to Rs 1.57 billion for the quarter ended June 2011. This is mainly on account of lower revenues. RCOM?s total revenues dropped 3.31 per cent to Rs 49.4 billion from Rs 51.09 billion during the period under review.

The company?s wireless ARPUs also declined from Rs 130 to Rs 103 during the period under consideration. The MoUs per subscriber per month registered a decline of 21 per cent from 295 in end-June 2010 to 233 in end-June 2011.

The company is reeling under debts of Rs 319.75 billion and has been unsuccessful in raising funds for repayment. In addition, an agreement to spin off the tower arm, Reliance Infratel, into a separate venture along with  GTL Infrastructure fell through last year. In this fiscal too, RCOM will be looking for a partner to sell stake in Reliance Infratel.

TTML

TTML reported a net loss of Rs 1.19 billion for the quarter ended June 2011 as against a profit of Rs 5.58 billion for the quarter ended June 2010.  However, its net sales rose to Rs 5.84 billion during the April-June 2011 quarter from Rs 5.52 billion in the corresponding quarter in 2010. During the quarter under review, the operator paid Rs 1.13 billion as interest on various projects.

MTNL

MTNL?s losses for the first quarter of 2011-12 stood at Rs 8.5 billion as compared to a net loss of Rs 4.51 billion in the quarter ended June 2010. The company attributes these losses to staff-related expenditure, including retirement benefits. During the quarter ended June 2011, the operator?s actual payout on retirement benefits stood at Rs 1.08 billion, a 60.71 per cent increase from the Rs 0.67 billion paid during the corresponding period of 2010.

MTNL?s total income decreased to Rs 8.43 billion from Rs 9.71 billion during this period. However, its total expenditure increased by about 6 per cent to Rs 11.75 billion during the same period. The company?s operational revenues were Rs 8.13 billion during the quarter ended June 2011, as compared to Rs 9.52 billion in the corresponding quarter in 2010. The company attributes this drop to its operations being limited to only the Delhi and Mumbai circles, and to market competition.

GTL Infrastructure

GTL Infrastructure recorded a stand-alone revenue growth of 27 per cent from Rs 1.1 billion for the quarter ended June 2010 to Rs 1.4 billion for the quarter ended June 2011. However, the company?s losses increased from Rs 193.29 million to Rs 839.53 million during this period. EBITDA for the quarter under consideration was Rs 794.5 million as against Rs 629.7 million for the quarter ended June 2010, registering a growth of 26 per cent.

On a consolidated basis, revenues from operations for the quarter ended June 2011 grew by 212 per cent to Rs 3.44 billion from Rs 1.1 billion for the corresponding quarter in 2010. EBITDA for the quarter ended June 2011 was Rs 1.95 billion as against Rs 629.7 million for the corresponding quarter in the previous year, recording a growth of 211 per cent.

GTL Limited

GTL Limited?s net profit decreased  62.86 per cent from Rs 351.04 million for the quarter ended June 2010 to Rs 129.32 million in the quarter ended June 2011. However, its consolidated net revenues increased 35 per cent to Rs 8.33 billion from Rs 6.16 billion during this period. Also, its EBITDA grew by 21 per cent to Rs 1.17 billion from Rs 971.4 million.

Tata Communications

Tata Communications? net loss stood at Rs 2.15 billion for the quarter ended June 2011 as against a net loss of Rs 2.36 billion for the corresponding quarter in 2010. However, results for the quarter ended 2011 are not directly comparable to those of the quarter ended June 2010 as these include the operations of Tata Communications Internet Service Limited.

The company?s total income for the quarter ended June 2011 stood at Rs 32.94 billion, up 13.59 per cent from Rs 29 billion in the corresponding quarter of the previous fiscal.

Sterlite Technologies

Sterlite Technologies? net profits for the quarter ended June 2011 declined 90.59 per cent to Rs 52.3 million from Rs 555.8 million in the quarter ended June 2010. The company?s total sales rose by 11.41 per cent from Rs 4.91 billion to Rs 5.47 billion during this period.