Rising data revenue narrows SSTL's Q2 net loss to Rs 402.5 cr

Sistema Shyam Teleservices (SSTL) today reported a narrowed down net loss of Rs 402.5 crore for the quarter ended June 30 on the back of growing traction from its data services and cost optimisation measures.
The company, which operates under MTS brand name, had reported a net loss of Rs 844.7 crore for the corresponding quarter last year.
The revenues of the firm rose 15 per cent to Rs 334.8 crore for the April-June period of 2014 as against Rs 290.9 crore in the same period of 2013.
Commenting on the performance, SSTL CEO Dmitry Shukov told reporters: "Our consolidated revenues grew 5 per cent quarter-on-quarter, driven by growth in non-voice revenues. Going forward, we expect strong momentum to continue, especially in our data business."

He added that blended mobile ARPU (average revenue per user) for the quarter rose 7.7 per cent to Rs 115 due to rising data usage. Non-voice revenues grew 14 per cent during the quarter.
Non-voice revenues, from both data and mobile VAS, for the second quarter stood at Rs 129.1 crore.

SSTL's data card subscriber base for the second quarter grew by 8.5 per cent to 1.4 million subscribers.
"Non-voice revenue contributed 38.6 per cent of the total quarterly revenues. The contribution of non-voice revenues increased by 331 bps during the quarter," Shukov added.
He said cost optimisation, strict control on marketing expenses and other expenditures and better operational efficiencies helped the firm decrease its operating income before depreciation and amortisation (OIBDA) loss to Rs 136.5 crore for the second quarter of 2014 from Rs 219.3 crore in the year-ago period.

SSTL made investments of Rs 33.2 crore during the second quarter of 2014. Debt from banks and financial institutions at the end of June 30 stood at Rs 3,614 crore.
In the reporting period, SSTL's mobile subscriber base increased 1.4 per cent quarter-on-quarter and reached 9.2 million customers as on June 30, 2014.
The company's mobile subscribers' minutes of usage for the second quarter of 2014 improved to 416 minutes versus 414 minutes in the first quarter of 2014.
Going forward, SSTL CFO Sergey Savchenko said the firm aims to drive revenue growth in data, focusing on achieving profitability.
"The plan is to continue investing in our data business and at the same time, through discipline, ensure improvement in our OIBDA margins," he added.

On the plans for rolling out LTE services, SSTL said it would need 4 blocks (1.25 MHz each) of contiguous spectrum for such services, which can happen through spectrum sharing or spectrum trading.
On spectrum auction, Shukov said there is a need for more clarity on the auction for 800 MHz (CDMA) spectrum, price and timing.