New Entrant Challenger, Uninor, a subsidiary of Telenor had declined to throw its hat in the 3G data war and wanst to focus on the Plain Vanilla Voice market in 6 circles where it has won licenses. Uninor Management believes the 3G ecosystem is not adequately evolved to invest in 3g spectrum purchase. It highlighted investment of large companies is restricted to only a few major geographies and 3g mobile penetration is at meagre levels. Telenor is currently selling data offerings on 2G platform and believes it is serving well for basic data services like emails and internet access.
Uninor Quarterly Performance
reported revenue at INR 7.6bn, 8.3% QoQ growth, led by healthy 7% traffic growth on the back of 1.5-mn subscriber addition. MOUs stand at a strong 434 minutes, growing by 1.9%. Telenor MOUs are ahead of incumbents, which could be largely due to a significantly 30% discount to large firms. ARPU stood at INR 100, growing at 2.7%.
Uninor management has highlighted its focus to breakeven by the end of FY14. With sharp cost control measures, management has over the past four quarters reduced EBITDA losses significantly. In the current quarter despite steady 8% revenue growth it was unable to reduce losses due to the addition of 870 cell sites, which added to overall capex and opex.
Uninor’s six circles together contribute about 37% of the industry pie. Further, it caters to about 35-48% of revenue contribution for Airtel, Idea and Vodafone holding high relevance.