Reliance Comm net towers on expanding footprints

Integrated telecom service provider Reliance Communications (RCom) more than doubled its net profit to Rs 1,220.84 crore during the quarter ended June 30 due to expansion of services to 4,000 towns and one lakh villages in the country. Net profit rose 138 per cent during the quarter under review from Rs 512.82 crore recorded during the same period of the previous financial year.

The country's second largest cellular operator's total income rose 32 per cent to Rs 4,303.70 crore (Rs 3,250.12 crore), Reliance Communications said in a release here today.

On a standalone basis, RCom posted a net profit of Rs 837.30 crore during the reporting quarter compared with Rs 474.17 crore recorded during the same quarter ended June 30, 2006. The company's total income rose to Rs 3,229.69 crore (Rs 2,732.16 crore).

Commenting on the results, RCom Chairman Anil Ambani said, "In the quarter under review, we have lined up significant financial achievements. Our operating margin of 42 per cent is now the highest for any telecom company in India. We have delivered the strongest profit growth by any telecom company in the country. Our EBITDA margin on a net revenue basis is 54 per cent, which places us in the group of top 10 telecom companies globally. The return on the net worth has expanded to 36 per cent this quarter with the increased utilisation of resource base."

RCom expanded its services to 4,000 towns and 1-lakh villages in the country, during the quarter under review. It added 3.87 million users and garnered a market share of 20 per cent in net additions, during the quarter. In areas where it operates both CDMA and GSM services, its market share of net additions stood at 32 per cent.

According to an industry analyst, the company's EBITDA margins rose 42 per cent from 37 per cent due to profitability across all businesses, personal, global and broadband. The mobile telecom industry in the industry has been posting robust growth and had added 7.3 million users last month, and this is being reflected on the telecom majors also. The country's largest mobile-phone operator, Bharti Airtel has also doubled its net profit for the June quarter to Rs 1,512 crore from Rs 755 crore in the year-ago period, he said.

RCom added 4 million wireless customers during the quarter compared with over 2 million in the corresponding quarter last year. This increased the company's total subscribers to 32 million. Its average revenue per user (ARPU) was steady at Rs 375 per month due to higher realisations per minute. On the broadband front, the company's total number of access lines rose to 70.50 lakh subscribers by the end of the quarter, more than double from 322,000 in the corresponding quarter last year.