Reliance Communications expects 3G to phase out 2G demand

Reliance Communications, which became a full GSM player recently, expects that the huge consumption and uptake of 3G technology currently would see the phasing out of 2G data.

Gurdeep Singh, CEO and president Reliance Communications' wireless business said on an analyst call yesterday that in 2-3 years, 2G data might be phased out with most subscribers migrating to 3G.

He said, 3G data consumption was supported by availability of content, devices and applications.

According to RCom, its wireless revenue growth of 21.3 per cent - highest in the industry - in the first quarter was led by data average revenue per user and 77 lakh 3G subscribers using over 342 MB per subscriber.

The company added it had the highest number of 3G subscribers among telcos as of June.

Singh added RCom was the only operator to have partnered with almost all handset players for data bundling.

He said, the company expected data to grow exponentially leading to further revenue per minute improvement for telcos.

He added, the company was confident of capturing 40 per cent of the smartphone market share, which was currently growing at 2 million smartphones a month.

The results come despite a slight drop in 3G subscriber additions in the quarter, attributed to seasonality, as the telco expected additions to increase from this month due to the festive season.

Reliance Communications, the most-leveraged among listed telecom service providers, suffered its fourth consecutive quarter of declining profits. Shares of the dual technology mobile player closed at Rs131.40, down 6 per cent on the Bombay Stock Exchange.

Total income during the period was up 3.6 per cent at Rs5,315 as against Rs5,130 crore in the preceding quarter.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) came in at Rs1,701 crore, up 2 per cent on comparable basis from Rs1,668 crore in the preceding quarter. According to the company Ebitda margin at 31.4 per cent was amongst the highest in the industry.

Finance cost for the June quarter stood at Rs687 crore, up 24 per cent from last year.

According to the company, during the period its wireless revenue stood at Rs4,816 crore, up 4.1 per cent sequentially from Rs4,626 crore in the preceding quarter, while the revenue per minute (RPM) rose to 45.7 paisa, up 4 per cent quarter-on-quarter.

''We have significantly improved RPM with tariff hikes and strong focus on paid and profitable minutes,'' the company said.