Sistema Shyam Dec quarter net loss at Rs 779 cr

Company's consolidated revenues were down by 3% Rs 390 cr from Rs 392 cr in same quarter last year

Sistema Shyam on Tuesday announced a net loss of Rs 779 crore for the quarter ended December 2012, compared with a net loss of Rs 1,197 crore in the year-ago period.

The company’s consolidated revenues fell three per cent to Rs 390 crore, against Rs 392 crore in the corresponding quarter of 2011. “In spite of the uncertainties, SSTL (Sistema Shyam TeleServices Limited’s) revenue remained largely stable in the fourth quarter and continued to expand year-on-year,” the company said. Its annual revenues rose 31 per cent — from Rs 1,234 crore to Rs 1,619 crore.

During the quarter ended December, the Telecom Regulatory Authority of India had introduced regulatory changes such as a change in the rates structure and more stringent customer registration requirements.

Even as Sistema fought off cancellation of licences and the related uncertainty, these resulted in a churn in subscribers, the company said. Its mobile subscriber base declined 10.5 per cent quarter-on-quarter to 14.89 million. The company said subscriber growth at MTS (SSTL’s mobile telecom service brand) was hit by the stringent norms on sales and marketing expenditures, aggressive tariffs and predatory practices of the competition.

“During the quarter, our focus was on retaining subscribers, controlling expenses and preparing for auctions. Post-auctions, SSTL secured spectrum in eight of its core circles. We now look forward to turning the page on last year’s uncertainties and building an even stronger business in India, through continued focus on our data-centric voice-enabled strategy,” said President and Chief Executive Officer Vsevolod Rozanov.

Rozanov added with the licence secured, the company could address 60 per cent of the data business potential, safeguard 75 per cent of its current revenues and significantly reduce losses.

During the quarter ended December, blended mobile average revenue per user increased two per cent to Rs 79. For 2012, it declined three per cent to Rs 81. The minutes of usage for the quarter increased to 268 minutes, compared with 263 minutes in the previous quarter, owing to higher traffic in the festive season.

SSTL reported an operating income before depreciation and amortisation (OIBDA) loss of Rs 278 crore for the quarter, a 74-basis-point improvement in the OIBDA margin.

“During the quarter, the company continued to take steps to reduce its cash outgo. These initiatives improved the OIBDA margins by 16 bps during the fourth quarter. SSTL recorded its lowest full-year OIBDA loss in the last three years,” said Chief Financial Officer Sergey Savchenko.