Reliance Communications to Franchise Reliance World + Competing Offer for DoCoMo – MTS

Last evening I had a chance to dial into Reliance Communications Earnings Call and here is an excerpt from the Sr. Management [ex Ambani]. My comments will appear in Italics.

• Satish Sheth, Group MD of RCom said – The company has received encouraging response after the end of Customer Experience program which was  launched during nationwide GSM roll out. The company was able to migrate them to other plans and retain them [No Numbers were disclosed]. RCom is the Largest Wireless operator in the country covering 90% of population and is also the Largest Wireless Data carrier. The company remains bullish on Reliance NetConnect Broadband+ service launched on CDMA network using the EVDO technology. [No Subscriber Numbers disclosed ] RCom is planning to add more Reliance World stores on franchise model.
• Reliance Infratel which recently struck the deal with Etisalat DB is also cutting more large B2B bandwidth deals even carrying competitors  traffic.
• RCom’s enterprise business unit has launched a new data center in Paris. The company is striking deals with Financial Trading entities where Network is the Computer. [Wall Street firms made $21 bn in Automated Trading in 2008]
• Mr. S.P.Shukla on Wireless Business – I should say he is really a cool man and has an unusual humor.  Mr. Shukla said that MoU of new wireless customers is low and when the same customer matures his MoU starts rising as his number become available with many other people. The impact of Mobile Termination Charges on RCom’s ARPU was Rs 11. Just like the GSM lobby, RCom has also cooled off in CAPEX and the company had just 1/10th of its overall CAPEX guidance of Rs 110 bn for FY 10. Shukla said that they are optimizing operations and will add new towers on modular basis depending on traffic and requirements. [Looks like its a Industry wide initiative in Q1 FY 10]
• RCom management refused to give the break-up details of GSM and CDMA [Subscribers, Investments, Revenues etc]. However, TRAI’s data suggest that CDMA’s growth has halved lately [ coinciding with GSM launch ? We don’t know]. The management guided its GSM and CDMA growth rates will be at par with the industry.
• Surprisingly, RCom doesn’t even reveal its VAS revenue. However, they said it will be higher in the forthcoming quarter as GSM was launched only in pre-paid segment first and later post-paid. [Well in India we have ~6% post-paid customers and rest pre-paid, so you know what difference it will make to VAS ;-)]
• RCom’s Shukla Planning a Competing Product for 1 pasia / sec / Pulse – It was nice to hear him say “We wish them Good Luck” and hear someone giggling. Shukla claims historically, Reliance has given innovative offers  and generally they do interesting things first which the rest of the industry follows. They are scheduled to launch competing offers for the same 🙂
• Alcatel Lucent JV is more of Network Management Contract without any further details being disclosed.
• RCom’s QIP is not related to or dependent on it bidding for 3G and it may happen before that as well.

We can only wish RCom gets more transparent in reporting its numbers and operations going forward without fearing competitors 🙂