RCom okay with RIL in telecom

Reliance Communications (Rcom) on Monday said the company would welcome the entry of Reliance Industries into the telecom sector. “If there is a responsible player going to expand the data pie, it's a very good news,” Syed Safawi, president & chief executive of RCom’s wireless business unit said.

He also said RCom was talking to other telecom companies to offer its telecom towers on lease. He, however, did not elaborate on the companies in a conference call with analysts.

While its peers reported muted traffic/revenue growth numbers due to a seasonally weak quarter, RCom registered a 2.1 per cent and 1.6 per cent sequential growth in wireless revenue and traffic.

The company said it would be able to maintain revenues per minute at 44-45p on the back of reducing free minutes on the network and focusing on paid minutes. The company is after the high margin, non-voice segment, now a fifth of revenues, as well as third-generation (3G) services to improve average revenue per user. It has 2.1 million active 3G users.

While there are improvements at the operational level, it has a $1.1-billion foreign currency loan payment due in March 2012. Though the company says it will look at internal accruals, analysts believe a part of the money is likely to come from debt. Leasing of the towers should help it improve their utilisation and its revenue.

RCom reported a 43 per cent drop in net profit to Rs 252 crore in the quarter, the ninth straight drop.