Bangalore: India’s second largest mobile phone operator, Reliance Communications Ltd (RCom), reported fourth quarter (Q4) profit rose 47% after it wooed a record number of users by offering them services for less than Rs200. And even as the country’s apex court ruled against it in a tariff dispute with the state-owned Bharat Sanchar Nigam Ltd (BSNL), the company announced that plans to list a division in London.
Net profit rose to Rs1,500 crore in the three months ended 31 March, the Mumbai-based company said. That beat the Rs1,380 crore median estimate in a Bloomberg survey of seven analysts. Sales gained 35% to Rs5,300 crore.
Chairman Anil Ambani aims to spend as much as $6 billion this year on expanding coverage and rolling out a second countrywide network as he works to narrow the lead with bigger rival Bharti Airtel Ltd.
Ambani’s wireless operator that currently uses the code division multiple access technology was allotted the additional airwaves by the government in January to expand a network based on the more popular global system for mobile communications (GSM) platform across India.
RCom, which offers a Rs199 prepayment plan against Bharti’s Rs295 plan, added a record 4.8 million customers in Q4, more than 90% of them prepaid customers.
Shares of RCom added Rs5.05 each, or 0.88%, to end trading at Rs579.75 on the Bombay Stock Exchange on Wednesday. The stock has gained 21% in the 12 months to 31 March compared with the benchmark Sensex’s 20% advance.
Expanding footprint: Reliance Communications, which offers a Rs199 prepayment plan against Bharti Airtel’s Rs295 plan, added a record 4.8 million customers in the fourth quarter, more than 90% of them prepaid. (Photo: Rajiv Dabral / Mint)
Meanwhile, the Supreme Court ruled in New Delhi on Wednesday that the company’s “limited mobile” fixed-line phones are a wireless service. Tata Teleservices Ltd’s similar “Walky” is also a mobile-phone service and attracts this fee, the court ruled.
The two companies had, in September 2005, challenged a Telecom Disputes Settlement and Appellate Tribunal’s order that these services were mobile in nature. The services are based on “wireless in local loop” technology, in which the instrument or handset is mobile within a limited range.
The ruling comes as India seeks to phase out the access- deficit charge that private operators pay BSNL for using its network.
RCom and Tata Teleservices are competing for customers in a wireless market that has overtaken the US as the world’s largest after China. India added a record 10.2 million mobile phone subscribers in March.
“We are just looking into that,” Rajeev Narayan, Tata Teleservices’ spokesman, said by telephone when asked about the Supreme Court’s ruling. “It’s been there for a number of years,” he said about the Walky service, without giving details.
RCom spokesman Gaurav Wahi couldn’t immediately be reached on his mobile phone.
In another development relating to the company, chairman Ambani said in Mumbai that the firm may list its Globalcom division on the London Stock Exchange this fiscal year. Bloomberg
P.S. Patnaik in New Delhi contributed to this story.