Reliance Communications (RCOM) has reported a 39.7 per cent drop in net profit for the quarter ended September 2010, from Rs 7.4 billion in the quarter ended September 2009 to Rs 4.46 billion for the quarter ended September 2010. The EBITDA margins for the company stood at 32.4 per cent for the quarter ended September 2010, down 300 basis points from 35.4 per cent on a y-o-y basis. The company has attributed this decline in profit to the ongoing tariff war in the Indian telecom space and investments made in rolling out its GSM network.
RCOM?s revenues for the quarter ended September 2010 were at Rs 51.18 billion, down 10.2 per cent from Rs 57.02 billion in the corresponding quarter last year. ARPU for the quarter ended September stood at Rs 122, down 24.2 per cent from Rs 161 for the quarter ended September 2009. The mobile minutes of usage (MoU) per customer per month was at 276 down 18.8 per cent from 340 for the corresponding period the previous year.
Reducing the existing debt of Rs 330 billion remains a lingering concern with the company. RCOM expects its cash flow to take care of the capital expenditure required going forward, without resorting to any further borrowing. Moreover, with most of the investment required to roll out 3G services, which RCOM expects to roll out in the current quarter, in place, the company?s capex (Rs 35 billion for 2010-11) is likely to be revised down.
