Reliance Communications Q3 profit up 2.8 pct at Rs 108 cr; tariff hike on anvil

Feb 07 2014, 21:02 IST
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Reliance Communications consolidated net profit 1.08 billion rupees for its fiscal third quarter. Reuters Reliance Communications consolidated net profit 1.08 billion rupees for its fiscal third quarter. Reuters
SummaryReliance Communications had posted a net profit of Rs 105 crore in the year-ago period.

Reliance Communications (RCom) today reported a 2.7 per cent jump in its consolidated net profit at Rs 108 crore for the December quarter of this financial year and said tariff will go up as spectrum prices are high.

The Mumbai-headquartered firm had posted a net profit of Rs 105 crore in the year-ago period.

"The performance is coming on the back of good quality mix of customers-- data, 3G and 2G. Our consistent efforts are to improve RPM, pushing paid and profitable minutes on the network by eliminating free and promotional minutes," RCom's President & CEO for Wireless Business Gurdeep Singh told PTI.

Revenue per minute (RPM) on RCom's network increased by 5.1 per cent to 43.5 paisa in reported quarter after a hike in tariff.

"I do maintain that telecom business is at a stage where we cannot absorb any more inflationary pressures. As input costs rise we will continue to pass on that to customers. Spectrum is biggest input material...in the coming few quarters you will a see price hike," he said.

The ongoing spectrum auction has seen about 80 per cent increase in base price of airwaves of certain frequencies. RCom is one of the bidders.

At the end of fifth day of auction, telecom companies have jointly made bids worth about Rs 54,600 crore.

During the quarter under review, the company's average revenue per user increased by 11.6 per cent to Rs 125.

The company, which claims it has the largest 3G customer base in India, said its total data customer base grew 31.2 per cent y-o-y to 36.2 million, including 11.1 million 3G customers in the December quarter.

"Tower deal (with Reliance Jio) will expand over life-cycle of towers which is valued at about Rs 12,000 crore. We are at various stages of making availability of delivery of those towers to RJio. No sooner we complete that hand over, we will look at securitisation of those proceeds coming against tower lease agreement to help lower our debt," Singh said.

RCom and RJio had entered in to an agreement in June 2013 under which Mukesh Ambani led firm will lease up to 45,000 mobile masts from the company.

Revenues in the October-December quarter this fiscal rose by 2 per cent to 5,403 crore from Rs 5,301 crore in the same quarter of 2012-13 fiscal.

"Q2 (July-September) is seasonally a weak quarter. If you see revenue growth in this quarter from first quarter, every other operator is almost

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