Sistema’s India operations losses widen Rs 663 crore
DELHI: Mobile phone company Sistema said losses from its Indian arm widened by 63% to Rs 666 crore for the three months ended March 31 and attributed the fall to rising cost of operations and additional capital expenditure to expand services to new regions in the country.
"The decrease in margin is on account of increase in operational costs due to further scale up operations across all circles. Additionally, the circles of UP East, West and Gujarat, were launched in the latter part of 2010, hence the impact of their launch was felt in Q1 2011," the telco, in which the Russian government recently picked up close to 20% stake,said in a statement. India's Shyam group has a minority 26% stake in the teleco.
Sistema Shyam's results are a pointer that expansion costs, interest payouts for thousands of crores in loans for putting up networks in new areas and lower usage by new additions outside metros and big cities will continue to squeeze its profits and margins of all new entrants that are struggling to make in mark in the ultra competitive 14-player market.
The company's consolidated debt stands at Rs 5,584 crore.The telco's losses widened despite its sales jumping three-folds to Rs 236.2 crore during January-March quarter of FY'11, as against Rs 78.6 crore in the same period last year.
For the first time, our revenue growth during the quarter was faster than our growth in wireless (voice and data) subscribers, the company said.The company's results however have two key pointer that indicate that underlying trends are still positive.
First, its blended Average Revenue Per mobile User (ARPU) for the quarter remained consistent at Rs 82, as against a declining trend in the market. But, this is still low when compared to incumbent GSM operators such as Bharti, Idea and Vodafone, whose ARPUs are close to the Rs 200 mark.
Next, against an industry average of 10-15%, Sistema said its data services offerings accounted for a quarter of its revenues. "Non voice revenues from both data and mobile value added services for the quarter (was) up by 33% Q-o-Q to INR 588 million (Rs 58.5 crore) which contributes 25% of total revenue and the same has increased by 2 percentage points for the quarter," the company added.
It also said that at the end of Q1 2011, the company had expanded its mobile data services to 130 cities in India, including all five metros. The number of data subscribers increased by 36% over Q4 '10 to 580,000. Currently, MTS' HSD services are present in over 150 cities, its statement added.
"The decrease in margin is on account of increase in operational costs due to further scale up operations across all circles. Additionally, the circles of UP East, West and Gujarat, were launched in the latter part of 2010, hence the impact of their launch was felt in Q1 2011," the telco, in which the Russian government recently picked up close to 20% stake,said in a statement. India's Shyam group has a minority 26% stake in the teleco.
Sistema Shyam's results are a pointer that expansion costs, interest payouts for thousands of crores in loans for putting up networks in new areas and lower usage by new additions outside metros and big cities will continue to squeeze its profits and margins of all new entrants that are struggling to make in mark in the ultra competitive 14-player market.
The company's consolidated debt stands at Rs 5,584 crore.The telco's losses widened despite its sales jumping three-folds to Rs 236.2 crore during January-March quarter of FY'11, as against Rs 78.6 crore in the same period last year.
For the first time, our revenue growth during the quarter was faster than our growth in wireless (voice and data) subscribers, the company said.The company's results however have two key pointer that indicate that underlying trends are still positive.
First, its blended Average Revenue Per mobile User (ARPU) for the quarter remained consistent at Rs 82, as against a declining trend in the market. But, this is still low when compared to incumbent GSM operators such as Bharti, Idea and Vodafone, whose ARPUs are close to the Rs 200 mark.
Next, against an industry average of 10-15%, Sistema said its data services offerings accounted for a quarter of its revenues. "Non voice revenues from both data and mobile value added services for the quarter (was) up by 33% Q-o-Q to INR 588 million (Rs 58.5 crore) which contributes 25% of total revenue and the same has increased by 2 percentage points for the quarter," the company added.
It also said that at the end of Q1 2011, the company had expanded its mobile data services to 130 cities in India, including all five metros. The number of data subscribers increased by 36% over Q4 '10 to 580,000. Currently, MTS' HSD services are present in over 150 cities, its statement added.
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