Reliance Infocomm's losses touch Rs 2,686 cr

Reliance Infocomm Ltd and Reliance Communication Infrastructure Ltd had accumulated losses of Rs 4,890.85 crore on December 31, 2005.

According to the information memorandum of Reliance Communication Ventures, the group's holding company for the telecom business, the losses of Reliance Infocomm were Rs 2,685.87 crore and that of Reliance Communication Infrastructure Rs 2,204.98 crore.

The information memorandum also said some of the group's operating companies might continue to incur net losses in the foreseeable future.

"Our operating companies have incurred losses and recorded negative cash flows in the recent past and expect to continue to incur substantial expenditure on account of capital and operational costs," it said.

Reliance Infocomm and Reliance Communication Infrastructure have approved write-offs and provisions for Rs 2,382.93 crore and Rs 2,104.20 crore, respectively. These write-offs are related to bad debts, inventories, impairment of assets and other non-recurring expenditures, for the period up to March 31, 2005.

According to the memorandum, although the operating companies were posting growth in revenue terms, this may not be indicative of future operating results and they will have to "generate significant revenue and efficiently control capital and operating expenses to achieve profitability".