SSTL loss narrows to Rs 316 cr in Q1

The company recorded net loss of Rs 643.9 cr during same period last year

Sistema Shyam Teleservices (SSTL), on Wednesday, reported net loss of Rs 316.2 crore for thefirst quarter ended March 31, 2014.

The company, which operates under MTS brand in India, has reduced its loss by more than half as compared with the net loss of Rs 643.9 crore reported during the same period last year.

"The net lossreduced mainly due to reversals of estimated provisions and lower interest expenses," said Dmitry Shukov, CEO, SSTL.

SSTL's revenue declinedby 9.4% to Rs 318.8 crore during the quarter, from Rs 352 crore in thesame quarter the previous year. However, its revenue increased by about 6.4% as compared with the revenue of October-December 2013 quarter.

"During the quarter our revenues grew by 6.4% quarter-on-quarter, largely driven by growth in minutes and in non-voicerevenues. We also launched the most aggressive data plans in the country tofurther supplement our 3G PLUS network. We expect the strong momentum in datato continue," Shukov said.

The company provideshigh speed wireless Internet services in over 600 towns in 9 circles.SSTL said itexpects the Government to auction 800MHz band spectrum, at present used for CDMA technology, at a reasonable base price without delay so that the companycan expand operations.

Shukov said the Government should fix the reserve priceof the 800MHz spectrum 80% of the market determined price of 1800MHzband.

This would be about two% lower than the base price set for thelast auction conducted in March 2013.Telecom RegulatoryAuthority of India (Trai) has recommended the reserve price at Rs 2,685 croreper megahertz pan India,which is around 50% higher than the previous pan-India base price.

Shukov said SSTL'sfuture expansion would depend on the regulatory changes and clarity over issueslike trading and sharing of spectrum, merger and acquisition norms and auctionof 800MHz spectrum.

While the company is open to discussions on possible M&As, it would only take further step once it gets clarity on the regulatory front. In the pastquarter, 35.3% of SSTL's revenue came from non-voice services, which is the highest in the industry.

The company's operatingloss before depreciation and amortisation during the quarter reduced to Rs 97.5crore from Rs 211.3 crore in the corresponding quarter previous year.

"Marginsimproved on account of cost optimisation, strict control over marketing, other expenditures and operational efficiencies. The OIBDA loss for the quarter also includes reversal of estimated provisions for expenses in exit circles onaccount finalisation of liability," said SSTL Chief Financial Officer Sergey Savchenko.

The company's blended average revenue per user has increased 9.8% to Rs 107 during the quarter on account of increase in minutes of usage and cleaning up of inactive subscribers.