Reliance Communications Q1 FY10 Results Lackluster
Reliance Communications reported revenues of Rs 6,145 cr and a PAT of Rs 1,637 cr for Q1 FY 2010. Compared to March Quarter, Revenue Growth is Flat while Profit Growth is 12.5%. The company has surprised us with EBITDA Margin expansion of 100bps, taking it to 39.9%.
The company has not yet released the ARPUs etc. Stay tuned.
Update:
Wireless ARPU is down to Rs 210 from Rs 224. This is strictly not comparable with other operator ARPUs as Reliance clubs the Revenues of CDMA + GSM + Fixed Wireless + Data Card Users in Wireless Segment. However, the reduction in mobile termination charges has hit the company’s ARPU by Rs 11. Wireless MoU is marginally down to 365 from 372.
Reliance now has 79.61 mn Wireless Customers with a market share of 18.9%. Rate of net addition slowed down from 25.6% a quarter ago to 19.5% for the June Quarter.
Reliance Wired Broadband reported a pathetic growth by adding mere 37,000 lines taking the total number of access lines to 1.42 mn connecting 967,100 buildings. ARPU for Broadband has slipped from Rs 1,735 to Rs 1,626. With Airtel broadband slashing Tariffs, I’d expect pressure at Reliance as well. The division got mere 1% of the overall CAPEX in this quarter.
BSNL transforming 32,000+ Indian Villages with Broadband Connectivity
Forget Bijli, Sadak Paani [Electricity, Roads, Water] – the basic infrastructure for living which you may not find in many Indian towns and villages but we have the power of Wireless communication and now Broadband 
State owned, BSNL has taken an excellent decision to make the best use of its PAN India OFC and Copper network. Utilizing the Universal Service Obligation Fund, BSNL is in the process of setting up 28,000 rural broadband wired exchanges and 5,900 V-Sat linked exchanges. This is a significant move especially for Internet Application and Web Site developers as they can take into consideration the target audience.
What exactly is a Rural Exchange ?
I was surprised when they said they are going to establish an exchange in each village which will require big investments. I later spoke to Engineers at BSNL and found out that they will install a DSLAM in each of these 28,000 villages [rural exchanges] to connect to the nearest SDCA – Short Distance changing Area or SSA – Secondary Switching Area as feasible. I am not sure on how they are Read more
Online Classifieds – Local Language + Smaller Cities to Gain Traction – Amarjit Batra, Olx
Olx, global online classifieds platform has established its presence in India since 2006. I had an opportunity to interview Amarjit Batra, Olx India, CEO who was earlier with eBay for over 5 years and has deep understanding of B2B, B2C and C2C Internet business in India. Here is an excerpt from the same.
Building the Olx brand in India:
We would be able to build a strong brand when our users enjoy using OLX for their everyday requirements of buying, selling, exchanging, trading products and services and have a great experience while using the site. Our effort is to continuously provide them the best classifieds platform and the best classifieds content in their city and make their OLX experience memorable and referable. Once we make a difference to their lives, whether it’s getting them their dream job, selling their old car directly to a buyer, finding the house that they always wanted to own, or helping them start a part time business of selling online, we are making a meaningful impact for them. The OLX team is committed to Read more
160by2 Launches Ad Free Mobile App + Ad Free Paid Web Interface to send SMS
160by2.Com one of the first FREE SMS service providers has launched “Ad Free Mobile SMS Application“. Yes, you read that right. With your smart phone, just point to http://m.160by2.com/app and you are all set to download and start messaging your friends for FREE and the number of characters in the message stands enhanced to 145, Goodbye to 80 Check out supported handsets here.
Web users [messaging from 160by2.com] have also been given the option to send Ad Free messages with character count up to 148 characters. However, this service will cost you $1.329 / Month or $2.87 / 3 Months or $5.45 / 6 months. The limit on the daily volumes remains 50 SMS a day at a maximum of 10 per recipient. The 6 months deal will cost you 3 paise / SMS. The service covers 7 countries – India, Kuwait, Saudi Arabia, UAE, Singapore, Malaysia & Philippines
One good thing about 160by2 SMS service is the messages reach the end user within a minute or earlier. Unlike Google’s SMS Channels which can be used for group messaging but the messages take really long time to reach. What other SMS services are you using ?
Global Social Networks overtake Indian Startups – Facebook Leads – Why the Fall ?
After over 18 months to 2 years in operation, India centric social networking startups are lagging Global peers by a tremendous margin. [Ref - June 2009 Traffic Data for India only ]
Facebook is the undisputed leader with 9.1 m unique visitors and a whopping 800 m page views. This is the only rising graph in the past 12 months. Globally Facebook had over 150 billion page views in June-09
Placeholder for Orkut – I am not sure of its ranking since data was not made available for the same. But will be competing for the first or second place.
BharatStudent – With an attitude of do whatever - right or wrong – Spam, Adult Videos etc has managed to survive and is able to attract 2.6 m unique visitors with 18 m page views. Subsidiary of NorthGate public listed company.
ibibo – Not just pure play social networking but with other content has managed to get 1.6 m unique visitors and 19 m page views. MIH group company.
myspace - clocked 1.3 m unique visitors with 16 m page views.
Hi5 – popular in East Asia had 1.1 m unique visitors and 31 m page views in India
BigAdda – Anil Ambani’s media blitz! not performing upto expectations had 830K unique visitors and 9.1 m page views.
IndyaRocks – Indian startup surviving the Social Networking Boom has still lost considerable traffic as it has halved since Sept-2008. Recorded 760K unique visitors and 21 m page views
Yaari – clocked 390K unique visitors and 4.8 m page views. Surviving on Google’s Ad Network.
MingleBox – Peak traffic recorded in April 08 and since then has fallen to a fourth. Clocked 150K unique visitors with 2.3 m page views. Focusing now on Education, college and test prep. The status of $7mn raised ? Any info ?
ApnaCircle – Sabeer Bhatia the Hotmail guy failing to impress the Aap ke Apne… managed to get 140K unique visitors and 2.2 m page views.
DesiMartini – The intelligent sell-off by Vivek Pahwa in Nov-07, before the economy crisis deepened had just 77K unique visitors and 1 m page views. Hindustan Times paid around $10 per page view in the Buy-Out, great deal
campus18 – A$$holes have you seen a network being shutdown for refurnishing ?
Why the Disastrous performance of Indian Social Networks ?
Technology Startup – VC $$$ – Me Too attitude won’t work. Consider for example, Mr. Ambani jumping into the bandwagon with really poor talent and pocket full of cash for marketing trying to compete with Facebook. You have the results before you.
Technology and Product Engineering Matters: Why Facebook can come and rule the Indian market and why not the opposite ? Facebook’s engineering team and product managers are simply marvelous. Once you decide on a cool feature, they go to any extreme to bring unmatched user experience. Here is a latest example on how they tweak TCP & UDP for Memcache.
Innovation only survivor of Recession: By observing the traffic pattern over the past 12 months, all the Indian networking sites have taken a hit. Innovators don’t copy, they lead and hence you have to have that out of the box approach rather than the “herd mentality”.
I can go on but would like to read your thoughts, comments and critics. Some more metrics about these networks is available as Paid Report
Bharti Airtel ConCall – Lower Termination Charges hit ARPU + NO M&A Plans + Mum on MTN + 3G + DTH
Bharti Airtel hosted Analyst call this afternoon and here is an excerpts from the same.
- Earlier this morning I had raised questions on the drastic QoQ fall of ARPUs and the management clarified that the same was due to new regime of lower mobile termination charges [MTC]. Rs 12 / user / month is the actual impact of MTC on Airtel.
- Over 60% of Revenues from non Tier-1/2 cities of India. Partnerships with IFFCO and Micro Finance institutions to expand rural mobile base. These customers typically increase their usage by 15-20% in 12-15 months after they go Mobile
- Management sounded happy with 478 MOU / Month with addition of 2 mn non-city subscribers every month. Airtel management not really worried about churning customers flirting with operators offering freebies.
- Bharti Airtel has no Mergers and Acquisition plans in the local market even though the Government and Regulator maybe setting the pitch ready in medium to long term.
- Tenancy revenue of Infratel tower is in the range of Rs 33,000 to Rs 36,000 a steep increase and the management didn’t have the answer ready to explain the same and said they will get back.
- Network operating cost has gone up to 18.3% from 14.5% 12 months ago and to 11.5% 24 months ago. Airtel is trying to be efficient but failed to satisfactorily explain the run-up in cost.
- On 2G Spectrum Availability – Lucky to get the necessary spectrum. If additional is not allocated timely, Airtel will not limit its growth but rather resort to better network planning and will incur higher CAPEX and continue to add subscribers.
- CAPEX Guidance – The management has given a CAPEX Guidance of $2.2 bn for FY 2010 excluding 3G bidding.
- Management decided not to comment on important questions like – Competitors offering per second billing, DTH Operations, Differential in Rural and Urban ARPUs, 3G and WiMax networks and bidding
- Quarter of Planned Network Consolidation – Airtel / Vodafone / Idea Cellular – Wireless CAPEX was significantly lower in Q1 FY10 and the management said that they wanted to consolidate without any haste to add new towers. Indus was also doing the same [Vodafone + Idea]The goal was to take stock of the existing infrastructure and measure efficiency before carefully beginning to expand where it is really essential.
It will be interesting to see the ARPU drop with RCom and which is already bleeding. The Telecom battle has just intensified, stay tuned
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