Reliance Communications(RCom) has posted a 48.5 per cent decline in consolidated net profit at Rs 156 crore in the fourth quarter ended March 31, 2014. The operator, which straddles both GSM and CDMA services, had reported a net profit of Rs 303 crore during the same quarter a year ago.
This quarter cannot be compared with the year-ago period as RCom had a one-time gain of Rs 550 crore during the previous year corresponding quarter. The gain was from provision for business restructuring, said Gurdeep Singh, Chief Executive Officer (Consumer Business) at RCom.
In the reporting quarter, RCom’s total income on a consolidated basis fell to Rs 5,671 crore from Rs 5,956 crore during the same period a year ago.
However, on a sequential basis, RCom’s consolidated net profit rose 43.9 per cent from Rs 108 crore and revenue increased 5 per cent from Rs 5,403 crore recorded in the third quarter.
“The quarterly growth was led by data traffic and stable revenues per minute,” Singh said, adding, “GSM and data contribute 72 per cent of wireless, 90 basis point growth from the previous quarter.”
RCom now serves 37.4 million wireless data customers. Its 3G customer base has risen 16.2 per cent from the third quarter to 12.9 million in the fourth quarter and about 34 per cent of its mobile Internet subscribers use 3G.
The Mumbai-based company’s average revenue per user, a financial metric, rose 2.4 per cent from third quarter to Rs 128, while revenues per minute was steady at 43.2 paise.
“The future belongs to profitable sustainable growth. We are already discontinuing free minutes and promotional schemes, and this is already reflecting in our ARPUs and RPMs,” Singh said.
RCom would continue to minimise the gap between headline tariffs and promotional tariffs, while the focus would be on data- and spectrum-led strategies for both GSM and CDMA operations. The company, which recently entered into inter-circle roaming partnerships with Aircel and Tata Teleservices Ltd to offer 3G services on a pan-India basis, expects to register gains after three months.
For the full year ended March 31, 2014, RCom’s net profit rose 55.8 per cent to Rs 1,047 crore (Rs 672 crore in FY’13) on revenue of Rs 22,321 crore (up 2.5 per cent from Rs 21,778 crore).
“For the industry, the hyper-competitive stage is behind us and rationalisation has started coming in. Going forward, I expect the industry to post profits every quarter,” Singh said.
Ahead of the earnings announcement, shares of RCom closed down 0.41 per cent at Rs 122 on Friday.