This has come as a surprise to me and most of the analysts in the call that Reliance Communications booked revenues by sales of proprietary CDMA handsets as Wireless Revenues. JeeZ!!!! This means actual Wireless Services Revenues far below competitors ? Since Tata Indicom is unlisted, we don’t know about it. But Airtel & Vodafone did bundle handsets, did they also do the same ? This explain the discrepancy in Wireless Revenues reported by the company to BSE & NSE and that reported by TRAI. [ Anyway, I am not an accounting major to audit and pin-point, but you understand the practice followed here] More excerpts from the call as follows, [My comments in Brackets] Continue reading RCom Reveals – Wireless Revenues Included Handset Sales – Discrepancy in Revenues Explained
RCom quietly announced its results yesterday [if you run a company and have bad results to announce, do so on a holiday, only if you are worried about huge SELL OFF in your stock] and the numbers look way too ugly. Employees at the Wireless division must be singing Queen’s song – Under Pressure 😉 Look at Wireless ARPU Rs 161 [GSM + CDMA + FWP] it has dropped 24% QoQ. EBITDA down 20% and Net profit has halved. Awesome!!! Quick peek into the results, Continue reading Reliance Mobile ARPU Drops 24% in Q2- Broadband ARPU Rises
If you recall my post on DoCoMo buying stake in Tata Teleservices at a super premium, I had ended the post by saying,
Shall we now expect Anil Ambani to strike a deal at higher valuations
And ET is reporting today that RCom is looking for a strategic investor to pump funds to the tune of $4bn [Assuming Ambani succeeds in selling RCom at twice the valuation of Tata Teleservices, RCom’s curent stock price doesn’t justify this ]giving them a stake of slightly less than 20% in order not to trigger the open offer clause. RCom and BSNL are the only telcos in the India? without a foreign investor. However, we expect the prospective investor will demand for transparency in RCom’s operations, accounting and audit practices which are under fire from vaarious sources, already.
So what will RCom do with all the cash ? [ Assuming someone will BUY Anil Ambani’s Telecom Saga ]
The company is rumored to Buy-back its FCCBs which are quoted at a discount. However, Mint analysts say that this is a big hype and premature for the stock to rally. RCom needs big pile of cash for its ambitious GSM expansion as well as WiMax and 3G auction apart from the ongoing CAPEX in other verticals.
We have reliably learnt that Reliance GSM / SMART will be launched in major Indian cities across India on the 28th of DEC, coinciding the birth anniversary of Late Shri. Dhirubhai Ambani [The Polyester Prince]
With Reliance Infratel IPO taking a backsteat due to the current state of Equity markets, Anil Ambani has no choice but to knock the doors of PE and VC funds.
Reliance Communications, an integrated Telecommunications company today announced its results for the quarter ended June-08. Key highlights of the results and conference call are as follows,
- Wireless Business [GSM + CDMA] continues to fill the company’s coffers. 18% wireless market share on PAN India basis. Slightly over 50 mn subscribers. Brings in 67% of the company’s revenue. ~91% pre-paid customers and 9% post-paid customer base. ARPU nosedives to Rs 282 with declining Minutes of usage 424 / month which is a cause of concern for Investors. Wireless revenue per month down to Rs 0.66 from 0.74. Mr. Prakash Bajapai of RCom seemed to be comfortable with Rs 0.66 paise and said, Other players RPM have come down to RCom level.
- RCom has 60% market share of the data card and USB Modem Internet access market.
- Mr. Ambani said, We have the management bandwidth to compete and grow organically and inorganically. To a question on GSM rollout an concerns about tariff war, Mr. Shukla said, It is not just the tariffs factor over which the customer chooses a service provider. Other factors like Quality, Reach and Network Capability. RCom’s entire GSM network will be EDGE compatible.
- Reliance Globalcom business is the second largest vertical for the company with 24% revenues contribution. Total ILD Minutes usage was down sequentially to 1,726 mn from 1,769 a quarter ago. However, NLD minutes went up to 6,641 mn from 5,964. NLD is not strictly comparable as some Reliance OnNet packages offers Unlimited calling anywhere in India.
- Reliance Broadband brought in 8% of the total revenues. Reliance Broadband is the only division in the company to have reported positive growth on QoQ basis with Net revenues up 8.8% and EBITDA up by 8.9% QoQ basis. The division now has 1.15 mn customers [broadband + narrowbrand]. But look at their ARPU in broadband segment which is whopping Rs 1,715 ~ Rs 600 higher than Bharti Airtel. Reliance has wired up 0.821 mn building across 42 cities. BSNL has 2.3 mn broadband subscribers and Bharti Airtel 0.85 mn at the end of June-08.
- Coming to the bottomline, PAT was almost flat QoQ basis at Rs 15,123 mn.
RCom continues to invest aggressively in CAPEX. Reliance Infratel and Globalcom IPO on hold due to heavy volitality in the stock markets. 3G policy will be announced in few hours, lets see if it’ll be acceptable to all the telcos.