CDMA biz to stop bleeding within 18 months: RCom

Company says it is attempting to reduce voice-only customers on its network and is looking to attract those who spend more on data and value-added services

Reliance Communications today said it expects its CDMA technology-based mobile business to stop bleeding and start contributing to company's growth within 12 to 18 months.

"We see in 12 to 18 months...Bleeding stop completely and this segment also contributing to growth," RCom Chief Executive Officer for Wireless Business Gurdeep Singh said to a query on the company's CDMA business during an analysts call on earnings.

He said the company is attempting to reduce voice-only customers on its network and is looking to attract those who spend more on data and value-added services.

"I would say in this bucket fill, inflow of pure play voice customers is being reduced dramatically and infill is happening with more of the smartphones, high-end feature phones. Attempt is to get better quality customers," he said.

RCom said its non-voice services contributed around 21% to its total revenues. It had 29.4 million mobile Internet users during the January-March quarter, out of a total of around 120 million subscribers.

The company has evolved a strategy to use CDMA spectrum mainly for providing wireless Internet services to increase revenues and migrate its predominantly voice customers to GSM technology platform.

"We are attempting at reducing part of business (CDMA) that has been a consistent bleed because of the stressed eco-system and we have been successful in migrating the bulk or weight of the business towards GSM and Data (Internet). As this ratio keeps increasing...The pull down factor keeps reducing," Singh said.

RCom has stopped providing entry level CDMA phones, costing around Rs 1,100, to its subscribers and has started selling phones starting at about Rs 2,200.

The company recently raised call rates by up to 30%. Singh said the telecom industry is no longer in position to absorb cost.

"Our internal objective is that in the next two quarters we want to stop the bleed. In a sense, in next or two quarters we should start seeing stagnancy in this before it begins to contribute as we begin to populate more CDMA smartphones on this network," Singh said.

The company saw revenue from its GSM and wireless Internet contributing 64% to its total wireless revenue, up from 57% a year ago.

Total income of the company has increased by 2.39% to Rs 5,130 crore during the January-March quarter as compared to Rs 5,010 crore in the same period last year.