Uninor suffers Rs 127 cr operating loss in Q1

The company saw a decline in ARPU in local currency by 7% to Rs 98 in the first quarter on an annual basis

Telecom operator Uninor, owned by Norwegian firm Telenor, on Wednesday reported an operating loss of about Rs 127 crore during the first quarter ended March 31.

The company posted a profit of Rs 1,561 crore a year ago due to refund of licence fee to the tune of Rs 1,660 crore from the government. The revenue of Uninor during the quarter grew about 19 per cent to Rs 1,108 crore from Rs 930 crore in the same quarter a year ago.

“The growth in (Uninor) subscriptions and the decline in average revenue per user (ARPU) resulted in revenue growth in local currency of 19 per cent compared with the same quarter last year, of which a large share of the growth is coming from the increased coverage deployed during 2014,” Telenor said.

The exchange rate of the rupee to the Norwegian krone declined to an average of eight in the first quarter of 2015 from about 10 in the same period a year ago. The Telenor Group’s profit after taxes increased by  10 per cent to Norwegian Krone (NOK) 4,053 million (Rs 3,246 crore) in the reported quarter from NOK 3,676 million ( Rs 3,700 crore).

Uninor, which operates in six telecom circles — Andhra Pradesh, Bihar, Gujarat, Maharashtra, Uttar Pradesh East and West, added 1.8 million subscriptions during the first quarter.

“Uninor had a strong first quarter, with 19 per cent growth in revenues and the subscription base 26 per cent higher than the same quarter last year. Network expansion last year is also yielding traction among customers for voice and internet service,” Telewings Communications Services (Uninor) Chief Executive Officer Vivek Sood said.

Uninor claims to have over 45.5 million subscribers and plans to start its operations in Assam by the end of this year.

The company saw a decline in ARPU in local currency by 7 per cent to Rs 98 in the first quarter on an annual basis.

“The ARPU decline was primarily driven by lower voice consumption and the impact from reduced mobile termination rate, partly compensated by increased data usage,” the statement said.

The company gained from reduction of mobile termination charges to 14 paise per minute from 20 paise by Telecom Regulatory Authority of India.

“As a net payer of interconnect charges, this change benefits Telenor's Indian operation,” the statement said.

Uninor has also increased its retail and distribution footprint to go deeper and wider in its operational circles.

The company now has over 3,65,000 points of sale and around 1,600 branded retail outlets with another 500 being added in the next nine months of this year.