Reliance Communications – Wireless Business rings cash registry
Reliance Communications, an integrated Telecommunications company today announced its results for the quarter ended June-08. Key highlights of the results and conference call are as follows,
- Wireless Business [GSM + CDMA] continues to fill the company’s coffers. 18% wireless market share on PAN India basis. Slightly over 50 mn subscribers. Brings in 67% of the company’s revenue. ~91% pre-paid customers and 9% post-paid customer base. ARPU nosedives to Rs 282 with declining Minutes of usage 424 / month which is a cause of concern for Investors. Wireless revenue per month down to Rs 0.66 from 0.74. Mr. Prakash Bajapai of RCom seemed to be comfortable with Rs 0.66 paise and said, Other players RPM have come down to RCom level.
- RCom has 60% market share of the data card and USB Modem Internet access market.
- Mr. Ambani said, We have the management bandwidth to compete and grow organically and inorganically. To a question on GSM rollout an concerns about tariff war, Mr. Shukla said, It is not just the tariffs factor over which the customer chooses a service provider. Other factors like Quality, Reach and Network Capability. RCom’s entire GSM network will be EDGE compatible.
- Reliance Globalcom business is the second largest vertical for the company with 24% revenues contribution. Total ILD Minutes usage was down sequentially to 1,726 mn from 1,769 a quarter ago. However, NLD minutes went up to 6,641 mn from 5,964. NLD is not strictly comparable as some Reliance OnNet packages offers Unlimited calling anywhere in India.
- Reliance Broadband brought in 8% of the total revenues. Reliance Broadband is the only division in the company to have reported positive growth on QoQ basis with Net revenues up 8.8% and EBITDA up by 8.9% QoQ basis. The division now has 1.15 mn customers [broadband + narrowbrand]. But look at their ARPU in broadband segment which is whopping Rs 1,715 ~ Rs 600 higher than Bharti Airtel. Reliance has wired up 0.821 mn building across 42 cities. BSNL has 2.3 mn broadband subscribers and Bharti Airtel 0.85 mn at the end of June-08.
- Coming to the bottomline, PAT was almost flat QoQ basis at Rs 15,123 mn.
RCom continues to invest aggressively in CAPEX. Reliance Infratel and Globalcom IPO on hold due to heavy volitality in the stock markets. 3G policy will be announced in few hours, lets see if it’ll be acceptable to all the telcos.
After Bangalore + Delhi, Mumbai plans citywide Wifi
After the initial hype and pilot runs, Bangalore Unwired has come to a grinding halt. Delhi planned to WiFi enable the city and looks like the project has taken a backseat for now. Then came the turn of Pune / Pimpri and now South Asia’s Financial Capital, Mumbai wants to WiFi enable the city. TCS has given the green signal for BMC’s WiFi ambitions after conducting a feasibility study. BMC plans to go for JV where they provide the Tower infrastructure while the service provider will provide the connectivity.
BMC thinks that a citywide WiFi will act as a catalyst in its e-Governance. BMC official is of the opinion,
It will be simpler for citizens to communicate within themselves or even with the government agencies. The integrated online and service delivery will reduce the cost of interacting with the city and in particular will reduce the paper burden on citizens, businesses and organizations, including community organisations.
Hopefully you guys will get it going.
Bharti Airtel – Q1FY09 Results Insight
Mobile services still constitute majority of the revenues with Enterprise Services gaining traction. Airtel reported a profit of Rs 20bn for Q1 FY09 up 25.7% compared to Q1 of last FY. Here is a quick summary of the results,
- Mobile Customers increased to 69.38 mn at the end of June-08 commanding a 24.2% all India wireless subscribers market share.
- Mobile ARPU decreased to Rs 350 from Rs 357 a quarter ago. However we have a positive surprise, Minutes of usage went up from 507 to 534.
- EBITDA margin for the segment declined ~480 bps sequentially to 30.7%, jump in network operating costs (up 11% Q-o-Q) seem to be the key reasons for the decline in margins.
- Airtel’s wireline service now spans 94 Indian cities serving 2.393 mn customers with ARPU / Month of Rs 1,138. DSL broadband customer base stood at 0.853m at the end of June-08. It was also voted as the Best ISP in the PC World Broadband Survey.
- Carrier Enterprise Services recorded a growth of of 70% over the corresponding quarter last year.
Unfortunately missed the Con Call, waiting for the transcripts to see if any aggressive investment plans for WiMax or Broadband in the forthcoming quarters.
Northgate’s Globe7 partners with Baidu and Alimama
Northgate Technologies Ltd through its wholly owned subsidiary Globe7 HK Ltd has formed partnerships with Chinese advertising giants, Baidu, Alimama and Allyes, to build mainland advertising exposure for Globe7 products Globe7.com, Egglad.com, Ziddu.com and Longhaier.com.
Clayton Haswell, president and CEO of Globe7 said,
We are glad to extend our Chinese network by working with the leading advertising partners in China. This will build our penetration in China, and provide our Chinese partners with a strong presence in India through our social networking sites there.
Baidu is China’s largest search engine and Alimama is part of the Alibaba group. Northgate also runs a Social Media Exchange platform.
15.8 Mn WiMax users in 4 years – Question for Springboard Research
In a report released by Springboard Research, the analyst forecasts a whopping 15.8 million WiMax subscribers in India by 2012. I am a little bit skeptical about this forecast.
At the end of May-2008, India had 4.15 mn broadband subscribers [most of them Wired / DSL] DoT’s target for 2010 is 20 mn broadband subscribers. To achieve this target, the growth in rate of subscriber addition should be 87.5% YoY over the next 2.5 years. However, between 2006 and 2008, the CAGR in subscriber addition has been 70%. Bharti Airtel the only company which transparently publishes its broadband subscriber figures indicate a growth rate of mere 33% YoY [between Fy2006-07 and Fy2007-08]. This means Bharti Airtel has been underperforming the industry growth rate in Broadband services. So assuming a base case scenario of 70% CAGR, India will have approximately 16 mn subscribers by the end of 2010.
Now coming to WiMax 1.0 in India, which is a miserable failure, I wonder why and how companies would like to go forward with deployments without addressing customer issues. My sources tell me there are 150,00 connections at the max on PAN India basis. However, lets consider 250,000 as on today and a 70% CAGR over the next 4.5 years will yield mere 2.7 mn, far shorter than Springbroad’s estimate of 15.8 mn subscribers. Adding to WiMax’s woes is DoT’s dirty brains to tie the cost of WiMax spectrum with 3G, thus escalating deployment costs.
I have dropped a mail to Mr. Wang of Springboard and it would be nice to see my calculation go wrong and India really have 15.8 mn Wimax and ~32-35mn wired broadband subscribers by 2012 
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