the monthly gross addition of subscribers coming down, there’s not much pressure on the operators to lower tariffs.
Analyst maintain that while such a move and trends are good, the real drag on the company in the coming quarters would be the finance cost due to the debt it took to acquire the African operations of Zain. Further, the African operations still continue to post net losses.
On the domestic front, regulatory costs continue to be a risk factor since the company has to pay a one-time charge for spectrum beyond 4.4 MHz, which is around Rs 5,200 crore. The company is also likely to participate in the auctions for the 900 MHz spectrum in March. It would have to renew its Delhi and Kolkata licences this year by paying the auction rates in the 1,800 MHz band. For the time being the company has obtained a stay order till the end of the month from the Bombay High Court over paying the one-time fee.
The African operations recorded a 15% rise in revenue at Rs 6,169 crore, compared with the Rs 5,357 crore reported a year earlier. However, losses almost doubled to Rs 520 crore from Rs 259 crore in the December quarter of 2011.