 "SSTL loss widens in Jan-March quarter")
Net income on quarterly basis increased 17 per cent to Rs 644 crore from a net loss of Rs 779 crore in the quarter ended December .
“The net income benefited due to improvement in OIBDA (operating income before depreciation and amortisation),” said President and Chief Executive Vsevolod Rozanov.
OIBDA loss of company narrowed to Rs 211.3 crore during the reported quarter from Rs 362.1 crore posted in the year-ago period.
Rozanov said this was lowest quarterly OIBDA loss recorded by company in the last three years as a result of cost optimisation, strict control over marketing and other expenditures and “on account of operational efficiencies. The OIBDA loss had stood at Rs 278.6 crore in the previous quarter.
The consolidated revenue of the company during the first quarter of 2013 also declined by about 14% at Rs 352 crore from Rs 407.2 crore it posted in the corresponding quarter of 2012.
“Revenue decrease was largely driven by closure of 13 circles, overall licence uncertainties and new regulatory requirements for customer registration. Moreover, the number of subscribers was further impacted due to strict control over sales and marketing expenditures, aggressive tariffs and market competition,” Rozanov said.
Its mobile subscriber base declined by 20% quarter-on-quarter and reached 1.19 crore by March-end. The company, however, reported an increase in the usage of its services in Q1, 2013 at average of 295 minute per customer from 268 minute it recorded in Q4, 2012.
SSTL revenue from non-voice services, from both data ad mobile value added services, for the quarter declined by 13% to Rs 1,25.5 crore, Rozanov said.
The company's data card subscriber base for the quarter declined by 12% to 15.6 lakh subscribers, but it lost only 1% data card subscribers in circles where it has decided to continue operations.
“With nine circles footprint, SSTL would be able to service 40% of country's population, address around 60% of data potential and also safeguard 75% of the company's current revenues,” said Rozanov.
“Year-on-year decline in net income-forex loss during the quarter was around Rs 47 crore and the one-time exit cost from circles was around Rs 170 crore". He said there was no actual loss from operations,” said SSTL chief financial officer Sergey Savchenko.
In April, SSTL had said that it targets to breakeven in India by the second quarter of 2015. It has already reached the break-even point in West Bengal telecom circles in the fourth quarter of 2012.
SSTL, which has bought fresh spectrum under the 800 MHz band through auction in March in eight circles and has announced its plans to provide 4G LTE services, estimated that the company would require investing about USD 200 million (about Rs 1,093 crore) to roll out 4G LTE. The company is planning to start network-testing within the next two months.
It had also said that it aimed to bring down its debt to about USD 700 million this year, from USD 1,047 million in 2012.
In March, SSTL won 3.75 MHz of spectrum in each of eight circles — Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) and West Bengal for Rs. 3,639 crore. The company already has operations in Rajasthan circle.
The company had entered India in 2008 and has reportedly invested around USD 3.6 billion (more than Rs. 19,000 crore) in the India.