Mumbai: Having incurred significant capital expenditure in creating network infrastructure including acquisition of third-generation (3G) wireless spectrum, Reliance Communications Ltd (R-Com) is aiming to increase data services revenue by expanding market share in this space by four percentage points to 24% in the next four to five years.
In a conference call with analysts on Monday, Gurdeep Singh, the newly appointed chief executive officer of R-Com’s wireless business, said the data services market in India was worth Rs.7,000 crore, of which R-Com had a 20% share.
“This market is expected to grow by Rs.30,000 crore in the next four to five years and our core drive is to garner a 24% share of it,” Singh said. “We believe that we can achieve this with the kind of assets we have. Our thrust (is) on developing the market through data cards and data services on hand-held devices.”
For the quarter ended 30 June, for which R-Com posted results on Saturday, the company had consolidated revenue of Rs.5,319.2 crore, up 7.5% year-on-year (y-o-y). Its net profit in the same period rose 3.2% to Rs.162 crore.
The Anil Ambani-led Reliance Group firm’s wireless business posted revenue of Rs.2,451.4 crore in the June quarter, and data services contributed 20.2%, Singh said on Monday’s call.
A Mumbai-based telecom sector analyst with a foreign brokerage said it will be an uphill task for R-Com to increase its market share in the data services business, considering the stiff competition that it is likely to face from other firms offering similar services and the new technologies such as fourth-generation broadband wireless. The analyst didn’t want to be named. (pl. check)
R-Com has taken initiatives such as launching three tablets and entering into an exclusive marketing partnership with Google’s Android to promote 3G data services in India. Singh observed that following the tie-up with Android, it had seen a significant addition to its base of Android customers, and that the company will soon be launching “mid-range smartphones”.
According to the company, R-Com has four million active 3G users on its network, with an average consumption of 240 megabytes of data per user.
Punit Garg, president and chief executive of R-Com’s global enterprise business unit, said R-Com had a planned capital expenditure outlay of Rs.1,500 crore in FY13, which is mainly targeted at strengthening its network quality and data services. The entire amount will be financed through R-Com’s internal accruals, he added.
R-Com shares gained 2.01% on Monday to close at Rs55.70 on BSE Ltd. The benchmark Sensex rose 0.43% to 17,633.45 points.