 "We are not chasing revenues: Gurdeep Singh")
Gurdeep Singh, president of the wireless business of Reliance Communications, told Katya B Naidu the company was not chasing revenue growth but focusing on profitability. Edited excerpts:
Why is the growth in earnings before interest, tax, depreciation and amortisation (Ebitda) not reflecting in your profits?
This is because our net finance charges have increased. We are not necessarily chasing revenues and topline.
Are you increasing voice rates? Is that why your average revenue per user (ARPU) and revenue per minute (RPM) went up?
Our ARPUs and RPMs have increased. The minutes of usage or MoU went down by 1.8 per cent but MoU is not the real measure of growth anymore. As long as we can grow Ebitda and margins, we are fine. Our non-voice revenue is 23 per cent, among the highest in the sector.
Have you increased voice rates and are you looking at further increases?
We have been course correcting. We are consciously passing on the inflationary pressures, and keep taking price increase circle-by-circle, and market-by-market. If you look at it, the average RPMs will continue to harden because of this. We will not absorb anymore cost increases.
Is there a data rate war in the market?
We had earlier decided to equate 3G data prices to 2G data tariffs in order to democratise data usage. With this, we hope to get a disproportionate share of data users into our network, by removing barriers of 3G adoption. The growth in the business will depend on the size and capabilities of devices in the market. Currently, only 10 per cent use 3G handsets but far bigger growth will come.
Why is the growth in earnings before interest, tax, depreciation and amortisation (Ebitda) not reflecting in your profits?
This is because our net finance charges have increased. We are not necessarily chasing revenues and topline.
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We are focussed on profitable growth and have been reducing free minutes and cleaning up subscribers who are earning below cost-to-serve. This is why our Ebitda grew along with Ebitda margins.
Are you increasing voice rates? Is that why your average revenue per user (ARPU) and revenue per minute (RPM) went up?
Our ARPUs and RPMs have increased. The minutes of usage or MoU went down by 1.8 per cent but MoU is not the real measure of growth anymore. As long as we can grow Ebitda and margins, we are fine. Our non-voice revenue is 23 per cent, among the highest in the sector.
Have you increased voice rates and are you looking at further increases?
We have been course correcting. We are consciously passing on the inflationary pressures, and keep taking price increase circle-by-circle, and market-by-market. If you look at it, the average RPMs will continue to harden because of this. We will not absorb anymore cost increases.
Is there a data rate war in the market?
We had earlier decided to equate 3G data prices to 2G data tariffs in order to democratise data usage. With this, we hope to get a disproportionate share of data users into our network, by removing barriers of 3G adoption. The growth in the business will depend on the size and capabilities of devices in the market. Currently, only 10 per cent use 3G handsets but far bigger growth will come.