Uninor's posts first ever annual operating profit but Q4 loss widens

The internet subscriber base has gone up by 106% in 2014 over the previous year

Uninor, the Indian unit of Norwegian telecom company Telenor, has posted its first annual operating profit, at Rs 855 crores for calendar year 2014.

However, in the final quarter ending December, the company showed a more than doubling of operating loss to Rs 276 crore, compared to Rs 132 crore in the same quarter of the previous year. The revenue rose 38 per cent to Rs 1,151 crore in the quarter, from Rs 836 crore in the corresponding quarter in 2013.

Revenue rose 36 per cent to Rs 4,070 crore last year, from Rs 3,001 crore in 2013.

It added 2.3 million subscribers in the quarter with a total base of 36.6 mn at year-end. Of this, Uninor said 22 per cent were active data users. "Our internet subscriber base has gone up by 106 per cent in 2014 over the previous year. Revenue from internet services also doubled in the period," said Uninor's chief executive officer, Vivek Sood.

Telenor's president and CEO, Jon Fredrik Baksaas, attributed the widening of loss to an increase in operational expenditure, mainly to meeting the target of installing 5,000 mobile sites, delayed due to rains.

"India is a future growth market for Telenor. The coming spectrum auctions will be considered by us for our future need," he said, according to an agency copy.

Telenor's chief financial officer, Richard Olav Aa, said the company had not decided on participating in the coming auctions.

Uninor has a permit for mobile services in seven of the country's 22 telecom service areas. Currently, it is operating in six -- Andhra Pradesh, Bihar, Gujarat, Maharashtra, Uttar Pradesh (East) and Uttar Pradesh (West).

Baksaas said Telenor in India would strengthen its position in the areas where it operates but for long-term need, would have to look for spectrum through which it can provide data services.

"Indian is not necessarily a national market. We are quite okay in the circles where we operate. The performance that we had and ability to capture customers is proof of that. Uninor needs access to data spectrum because the market is moving in that direction," he said.

The company will have to look for solutions when prices of fourth-generation service handsets come down to affordable levels, he said.